My parents were not born in the USA. Both emigrated to America from Italy when they were adults. For approximately 10 years, my family lived in an apartment on Willow Street in the largely immigrant neighborhood that has been known by many names over the years, depending on who you asked: Washington, Sacred Heart, Goosetown. My parents, both career teachers, made a choice to live on a tight budget during that time, which enabled them to make a down payment on the first and only house they have ever owned. Our family home is located approximately two miles away from the apartment, and it was chosen because of its location in a neighborhood with lower crime rates and an award-winning public school.

Looking back on my early years in the apartment, I recall the children living on our street made do by playing games in the driveway and on the roof of the carports, where laundry was hung to dry. Further down the street, there was a bar that, oddly enough, was located inside a house. Most noteworthy is the fact that there was no neighborhood park for residents to enjoy.

This same neighborhood was the focus of a land use discussion raised last week at the City Council meeting. The principal question before the council was whether or not a new school should open up in this neighborhood. Being familiar with this area, I believe a new school would benefit the community and interject a positive force into the neighborhood. A charter elementary school is being proposed; however, in the future the school could be a middle school, vocational school, etc. Thus, the rezoning allows for a school to occupy the land now and into the future.

The city of San Jose has no policy or budgetary role in the decisions concerning public schools, including charter schools. This is the domain of the state of California and locally elected school boards. The city provides auxiliary services—libraries, community centers and crossing guards—but this is the limit of our involvement. However, presented with the opportunity for a new school to be in this neighborhood, based on the land use aspect alone, I voted “yes.” A new school would offer an additional education option within the public school system, and having more choices as opposed to fewer choices is seldom (if ever?) a negative thing.

For those who voiced concerns regarding the negative traffic impact that a new school may bring to the neighborhood, I will not deny that this may indeed be the case. Thinking of the many schools that exist currently, it is doubtful most would have been approved if dependent on a positive vote from the City Council—all schools create traffic. And yet, in so many cases, schools make the neighborhood what it is today. It is common for neighborhoods with outstanding public schools to have higher real estate values, and sometimes these neighborhoods will even be named after the local school. What is actually more chaotic for a neighborhood is when a school closes, and hysteria engulfs the community concerning the future use of the school site.

I also acknowledge that the proposed school would be a smaller, urban-style school without the expansive lawn that we’d all like to see in an ideal world. However, a smaller outside play area would not change the quality of classroom instruction: students would still learn, a new recreational playground would be added to the neighborhood, and a strengthened sense of community would likely result.

After reviewing residents’ concerns submitted via email, phone and at the meeting, I empathized with the desire to open a middle school at this location rather than an elementary school. Unfortunately, the existing public school district has not moved forward with a new middle school for this area in 60 years, and it does not have any current plans in the works for any new schools. A charter school has the ability to adapt and modify its charter, and over time these schools may alter their use to become a middle school, or find another entity that can provide a middle school in the same location.

The proposed campus would open up as a Rocketship charter school, assuming a favorable vote by the county Office of Education’s board later this month. Rocketship currently operates several other charter schools in San Jose. Many of the students attending Rocketship schools come from disadvantaged backgrounds, and have struggled to keep pace with the higher test scores and academic performance of their counterparts living in more affluent neighborhoods. Some within the educational community believe that charter schools represent the most effective way to narrow this so-called “achievement gap,” and the impressive success achieved by many of the existing charter schools—as evidenced by the oversubscribed waiting lists and vastly improved test scores—seem to lend credence to this theory.

Charter schools are a subset of the public school system, yet they are exempted from a portion of the state’s education code and rules governing tenure. Charter schools must show that they have met stated goals in a valid, measurable way, and these schools are held accountable for their performance. Underperforming charter schools are shut down.
Charter schools can be a highly political issue for a variety of reasons. Whether or not one agrees with the underlying concepts of charter schools, for me this was ultimately a land use decision about a new school in a neighborhood that I am personally familiar with.

The city reached a deal with Jose Theater to extend the lease of the property, home to comedy club The Improv, for another 10 years. But a different item discussed at last week’s Oversight Board meeting could have a huge impact on the city’s upcoming budget.

Many of the historic buildings in the downtown area were purchased, renovated and brought to life by the now defunct Redevelopment Agency(RDA). One example of this is the $13 million restoration of the Jose Theater, which currently houses The Improv comedy club.

The Improv brings national comedy acts to San Jose, and with it an audience that animates the downtown district. The property was previously owned by the RDA and has now been transferred to the RDA successor agency, appropriately called the “Successor Agency Redevelopment Agency,” known by its acronym of SARA.

The City Council serves as advisory to SARA, but the SARA Oversight Board must ultimately approve all actions, such as the disposition of property or allocation of funds. Since the formation of SARA, I have attended the Oversight Board meetings in order to understand what options are before us as a city, and what impact any actions taken will have on the general fund.

Last week, the SARA Oversight Board, comprised of members from local tax entities as laid out by the state, approved a 10-year lease with the Improv. The terms of the lease allow SARA to charge rent and collect a portion of gross receipts on a monthly basis, and all proceeds go to pay off the debt. The county representative, who is not an elected official, stated that the city of San Jose was doing a good job in negotiating these leases, and that it was important to have this comedy club downtown as it draws more visitors to the area. I appreciated this perspective and positive feedback from the county board member.

Later at the same meeting, the Oversight Board discussed the Housing Due Diligence report. During the course of review, it was revealed that $10 million had not been allocated in a clear manner. In no time at all, a strong difference of opinion surfaced on how the funds should be spent: for building a specific affordable housing project or paying down the debt. Not surprising, the housing director, Leslye Corsiglia, wanted the entire $10 million to be dedicated only to the affordable housing project.

Bearing in mind that SARA has inherited over a billion dollars in debt from the RDA bonds that were issued over past decades, I could not support the “double whammy” outcome of yet another non-revenue producing project that simultaneously casts a blind eye to the city’s debt situation. (As an aside, I found it very interesting that when the subject of the $10 million was being discussed, the only other person present for this item—besides myself and staff members—was a representative from an affordable housing developer.)

As it turns out, the housing director has been lobbying the state Department of Finance (DOF), which oversees all of the oversight boards in California, for quite some time. The objective of the lobbying is to get a favorable opinion from the DOF that would exclusively dedicate the $10 million to the affordable housing project.

Such an action, with no further deliberation or input from the council, would fly in the face of flexibility, especially in situations that became available to cities when the state dissolved RDAs. Until the council has had the opportunity to weigh in on this issue, in the form of a public session, all lobbying efforts should cease immediately.

The flexibility reference above allows excess affordable housing funds to cover debt payments, or, in city speak, allows these funds to be “swept in.” If the city chooses to responsibly pay down the debt, it would have the additional benefit of avoiding any further hits to the general fund, which other city departments—police, libraries, etc.—draw from to provide services to residents.

This $10 million would minimize the hit to the general fund next fiscal year, which would permit us to pay down senior debt obligations and allow continued funding for other city services. As you may know, the general fund is currently covering the shortfall in SARA property tax revenue by paying the senior debt payments on the 4th Street Garage and Convention Center. Bridging this funding gap from the general fund means less money for day-to-day services such as public works, road maintenance, code enforcement, etc.

In conclusion, I feel strongly that the discussion of how the $10 million is allocated should go before the council for a decision in a public meeting. After all, it was already covered once at the public Oversight Board meeting, and I do not think this issue is one that would be best addressed in a closed session.

Furthermore, I disagree with the housing director’s viewpoint. It is shortsighted and untimely to advocate for an additional affordable housing project that would directly and negatively impact the general fund.

Ultimately, we all have choices and responsibilities in life, and we must work within the dictates of reality. The opportunity cost of allocating $10 million to an affordable housing project that doesn’t pay property taxes means we cannot simultaneously pay down our debt in the same amount. The money simply cannot be in two places at once.

By dedicating the $10 million to paying down debt obligations, it allows more funds to remain in the general fund and be directed towards vital city services.

All Nippon Airways will now provide a new direct flight from Mineta San Jose International Airport to Tokyo.

All Nippon Airways (ANA) hosted a reception last week in honor of a new direct flight from San Jose to Tokyo. The inaugural flight is scheduled for Jan. 11, 2013. ANA will also offer connecting flights to 22 cities worldwide. This is good news for SJC, because the new connection will create a positive economic ripple effect for San Jose and the region at large. A special thank you goes out to all those who advocated for a new direct connection to Asia.

While attending the event, I looked at the large ANA model of the 200-seat Boeing 787, and I thought about the council meeting from the previous day. The result of the discussion was to allow airport staff to shoot birds if they interfere with aircraft. When the time came to vote on this matter, one of my council colleagues expressed genuine concern and continued to question the best course of action.

It is very dangerous for birds to get caught in an airplane engine. Not only would such a scenario be fatal to the bird, but it could also cause the airplane to malfunction and potentially lead to a deadly crash. During council discussion, concerns were shared about the shooting of birds in vain and the net impact of such action as part of the grand bargain for airport safety.

It was also suggested that guns should be utilized only as a last resort, and that perhaps dogs could instead be deployed to scare away the birds. The suggestion of dogs being utilized in this capacity raised a whole new set of concerns for me, due to the potential cost and lack of practicality associated with implementing such a program.

I am a self-professed animal lover, and yet I still thought it was odd that a relatively lengthy council discussion would contemplate the life value of a bird over the potential death of 200 passengers on a plane. Human safety comes first in my book, plain and simple, end of discussion.

In the same meeting, the council reviewed the Comprehensive Annual Debt Report, which documents the total debt for the city of San Jose, currently a whopping $5.2 billion. This figure does not include unfunded liabilities for pension and health care, which would add an additional $3.6 billion to the total. At the Federal level, the national debt does not include unfunded liabilities like Social Security or Medicare. When unfunded liabilities are included, the National Debt catapults from $16 trillion to $70 trillion.

Once the meeting concluded, what struck me most was that the council discussion on the $5.2 billion debt was 15 minutes long, while the discussion on birds at the airport was 12 minutes in duration. Going forward, I am hopeful that the council will invest more time on the debt issue and, dare I say, less time discussing the fate of a flock of birds. Too bad we can’t shoot the debt.

There are many different forms of debt, but suffice it to say, we are tapped out. Onerous debt payments and servicing obligations take money away from the general fund, and therefore leave us with less money to pay for city services today. Whether we are looking into training a special service canine unit for avian abatement, or we are paying interest on our municipal debt, the money has to come from somewhere. This is why I take the role of a fiscal pragmatist seriously and advocate investing more time and effort on plausible solutions to reduce our municipal debt.

The City Council had a study session last week devoted to affordable housing. The session covered how San Jose could build more affordable housing, even though it has already publicly funded and completed roughly 21,000 such units in years past and has 1,500 additional units currently in the pipeline. As a point of comparison, other cities have done little during the same time period.

Comments from the council included advocacy for the building of more traditional single family homes, potentially in the Almaden Reserve and Coyote Valley, with the objective of bringing down the average cost of such dwellings. The economist who was invited to speak at the meeting said any newly constructed houses in the urban reserve may indeed sell, but following this path would be contrary to the changing, age-based demographics of San Jose (more seniors, more young people). In addition, statistics indicate that committed couples are having fewer or no children today compared to past decades, which highlights a demographic shift that alters demand for single family homes.

Most economists and urban planners agree that suburban sprawl is bad for city revenue and the environment. The majority of homes in San Jose are single family dwellings, and the resultant suburban sprawl has contributed to the city’s economic problems and transportation woes. Building out houses across the valley in Almaden and Coyote would only magnify the pain.

It was mentioned during the study session that 4,500 units of market rate apartments are under construction in North San Jose. Had the council approved the construction of single family houses instead of high density apartments, the result would have netted roughly 300 houses or 4,200 fewer housing units overall.

I asked the economist, point blank, which of the two options he would choose: 4,500 apartments or 300 houses. Not surprisingly, he chose the 4,500 apartments. The 4,500 units in North San Jose would create more overall affordability by providing additional housing (supply and demand). Three hundred single family homes is a drop in the bucket when considering the over 175,000 similar units that already exist. In contrast, the creation of 4,500 market rate apartments would add significantly more construction jobs, aggregated property and utility tax revenue, and larger park and road paving remittances than the 300 single family homes.

Additionally, the development of density in North San Jose does not create conflict with traditional single family neighborhoods and enables more of an active urban community that both young professionals and seniors alike seek out. This is significant, because young professionals and seniors are the two fastest-growing demographic groups in San Jose. And not coincidentally, they are also less inclined to choose a single family home and all of the inherent maintenance responsibilities that come with it.

The Housing Department will return to council in February 2013 with further information to consider. One option is to look at borrowing money by issuing bonds that would provide funding for more affordable housing construction. This is the same method utilized to purchase golf courses and the Hayes Mansion. San Jose is already in debt for over $800 million for past bond issuances, and this figure does not include the $1 billion plus attributable to airport bonds.

Yet another option would be to make market rate housing developers pay an “impact” fee to fund affordable housing. The enactment of such a fee would increase the cost of market rate housing to the future resident. The theory behind this approach presupposes that for every new, highly paid professional, more demand is created for workers in the service industry who will also need housing.

Speaking of “impact”, we should consider the impact of affordable housing developments on our police officers. I wrote and shared data on this impact 18 months ago.

I was not supportive of the ideas mentioned above at first glance, so I asked if some alternative options could be considered. One course of action would be to follow the example of Santa Clara and Mountain View, and waive adherence to prevailing wage ordinances on affordable housing construction. Doing so would lower the cost of construction, which in turn would mean that San Jose no longer has to subsidize these projects by continuing to waive infrastructure fees for road paving and parks. To date, the city of San Jose has waived more than $100 million of infrastructure fees to promote affordable housing.

Another idea I suggested concerns the distinction of affordable housing that is built by for-profit entities versus non-profit entities. Non-profits build the majority of the affordable housing in San Jose and are exempt from paying property tax. For-profit construction results in property tax revenues being paid to San Jose and other government entities, such as schools, that need the revenue to pay teachers. Property tax revenues are the largest annuity stream payable for ongoing city services in San Jose, and each and every time the council approves another affordable housing development exempt from property tax, we move one step closer to laying off another police officer or teacher. I have written before about the consequences of this lost revenue.

At the end of the day, I believe in quality over quantity when it comes to affordable housing. Everyone—not just some—should pay property taxes and contribute to the costs of road paving and the creation of new parks. This provides a good example of equity and paying as we go for infrastructure and ongoing city services.

I remember making minimum wage, $3.35 per hour, when I worked at Burger King during high school. Most of my coworkers were high school students, college students and very few were adults. Prior to my job at Burger King, I had a paper route that, according to my memory, netted out to less than minimum wage. In the case of the paper route, I had to pay for the newspapers, rubber bands, and bike expenses, not to mention my time to fold and deliver the newspapers. In addition, back then we had to go door to door to collect the monthly subscription.

Over time, I received raises at Burger King by passing tests on food preparation and positive performance evaluations. Merit-based raises of 10 cents were earned, and I achieved my top rate of $4.15 and a promotion to Production Leader. I recall enjoying the job except for the increased acne from working the fryer station and those ever-attractive brown polyester uniforms. Around this time, I actually contemplated quitting high school and pursuing a management position at Burger King. Instead, I stayed in school and went on to college like many of my fellow high school co-workers.

It seems like today that the opportunities for employment and taking on responsibility have decreased for our youth. The paperboy on a bike has turned into paperman in car. And Burger King-type jobs have changed from youth to adults, many of whom are recent immigrants.

I am voting “no” on Measure D, which would increase the minimum wage only in San Jose from $8 to $10 an hour. As a councilmember that represents a district that borders two other cities, I see firsthand how San Jose competes for retail sales, filling vacant commercial space and jobs. Westfield Valley Fair shopping center, for example, is split between Santa Clara and San Jose. If a new prospective tenant has a choice of space in the mall, they will choose Santa Clara should measure D pass, as I will explain.

Residents do not stop in their tracks when they reach the invisible border of a city limit. They shop based on convenience, quality and the big one—price. Measure D will put San Jose at a disadvantage just like the currently proposedHabitat Conservation Plan that Mayor Reed lampooned for over an hour at last week’s council meeting.

Measure D will create wage inflation. Workers that make $10 today will seek $12 tomorrow and so on. If a business only has so much money allocated for payroll, then the result will be laying off a certain number of employees or reducing hours to keep payroll in line with actual sales. I believe youth will comprise the majority of the layoffs and reduced hours. Measure D, which is a 38 percent increase in payroll (wages & payroll taxes) to employers who pay minimum wage, would not increase sales 38 percent nor even 1 percent.

A business in San Jose that employs minimum wage workers will simply have less profit margin and some of them will inevitably move. In the case of my district, these businesses will move just over the city border and those that remain in San Jose will increase prices. My dad, who grew up during the Great Depression, will drive to another city just to get a free plastic bag. When prices increase, my dad, who could easily win the game show, “The Price is Right,” will simply shop in another city.

Those that make $10 today instead of $8 are either performing well or have a more difficult job, which is why they make 25 percent more. Is it fair that the current $10 a hour worker would now be equal to a $8 hour worker? Does it create the expectation for future two-dollar wage increases through no effort of the individual? That is a debate in itself, however, the real problem is that San Jose is not a silo and we are surrounded by other cities.

Measure D would create retail vacancy in San Jose, especially near the border of other cities. Over time, new business will choose cities where payroll costs are lower and, most importantly, where their payroll is not regulated and audited by city government. For San Jose to comply with Measure D requires the hiring of people to oversee and regulate business for compliance with no revenue to pay for those new positions. I would much rather higher five new people in our planning department to expedite the process for industrial and commercial development than positions that add zero value, which Measure D would mandate.

The few cities that have raised the minimum wage are anomalies bordered by water or desert: San Francisco, Washington D.C. and Albuquerque.

To my original premise, I believe Measure D will result in less jobs for youth in San Jose. Employment for youth outside of compensation provides the opportunity to learn valuable life lessons.

On a related note, the majority of my council colleagues voted—but not me—to discuss and take a position on various State Propositions like the Death Penalty at this week’s council meeting. In my opinion this is a waste of timethat has nothing to do with the City Charter and we might as well discuss, how many angels can dance on the head of a pin.

The San Jose City Council met last week to discuss and prioritize certain ordinances the city should pursue in the coming year. Creating an ordinance requires staff time from the department that the ordinance will affect and, as always, time from the City Attorney’s office. In many cases, outreach for ordinances must be done to garner resident and stakeholder input which takes time and staff facilitating the public meetings.

The city is unable to move forward with every ordinance on the “wish list” much like any other organization public or private. Therefore, councilmembers are asked to prioritize by selecting their top choices and see which of those match their council colleagues’ preferences. An ordinance moves forward if it gets six votes, and those that don’t get selected remain on the list for next time, which is approximately one year. The council selected their top choices twice and was able to prioritize seven ordinances out of 30, which include:

● Converting Hotels & Motels to affordable housing.
● Closing Medical Cannabis Collectives that do not pay Measure U tax.
● Restricting Tattoo parlors near K-12 schools.
● Development Agreement Policy (Negotiate deals for Economic Development).
● Restrict burning of wood in residential fireplaces.
● Ban any construction within 100 feet of creeks.
● Survey vacant buildings to house the homeless and more to be discussed in detail at council study session on October 29.

Some of the other ordinances that did not make it include: limiting new Wal-mart stores; a healthy eating initiative; neighborhood preservation; liquor store conversions; downtown bars that provide music pay to fund police officers.

We could have had an extended discussion on each topic, however, the items selected will come back to the council for further discussion at least two more times.

Two items I voted for that did not make the list were liquor store conversion and distinctive neighborhoods. The liquor store conversion ordinance would have the potential to eliminate existing liquor stores. Liquor stores do not really add a lot of value in my view, and I would prefer to see alcohol sold at grocery stores, because grocery stores offer a variety of food. Over time this would allow for more grocery stores to open, which is seen by many as an essential component of a neighborhood.

Neighborhoods of distinction would allow private property owners to create their own zoning based on the majority of the property owners’ desires. So, rather than government mandating regulation, it is a tool that allows private property owners to make their own decisions. For example, an Eichler neighborhood may decide that it wants to maintain Eichler architecture (Post and
Beam) for any new construction within its neighborhood boundary.

One item that made the list was converting existing hotels and motels into low income housing. This seems like it would be an interesting discussion and would have a wide variety of viewpoints, depending on how it would be potentially implemented. More to come on this topic, for sure.

Prioritizing and ranking priorities is important for organizations. However, in the case of government, certain priorities may not always represent what constituents want. The only real way is through the election process, because we have a representative democracy where we choose to elect an individual to vote on behalf of a larger population. Maybe someday residents will vote by electronic devices from their homes to select priorities midstream. Until then, it is what it is.

This week the Council will again take up the proposed Habitat Conservation Plan. Personally, I have found it curious that most of the emails I have received advocating for the implementation of the HCP are from residents outside of San Jose.

Woody Allen had a theory on success. He said most of the hard work was just by showing up. (Photo by rasdourian, via Flickr)

Tuesday is the day that councilmembers reserve for City Council meetings.Closed session council meetings start at 9-9:30am and often continue past noon. The public council session starts at 1:30pm, often merging into the evening session with a short break. If no evening session is scheduled, then the afternoon session simply continues into the evening until the entire agenda is covered.

Woody Allen once said that, “Eighty percent of success is showing up,” and many would agree with that statement. Fortunately, I have not had any family emergencies and thus I have been able to attend every council meeting and council committee meeting since 2007. Many council meetings, especially the years 2007-2010, went from morning till near midnight. It is our duty to attend the council meetings, specifically for the agenda items that require voting, and stay for as long at the meeting takes; just like an employee is expected to attend a meeting hosted by their employer.

Councilmembers have an obligation to attend council meetings and council committee meetings; however, there is no requirement that you must actually stay the entire meeting. But attendance is taken multiple times at council meetings.

First, you are marked absent if you are a few minutes late at the very start of the morning closed session meeting. Attendance is taken again during the closed session meeting, when each attendee signs a document. Finally, attendance is again taken at the afternoon and evening meetings.

Councilmembers are able to leave as needed if they are not feeling well or have some personal matter to attend to. Councilmembers need only be present for half the meeting to avoid being marked as absent. If not present for the vote of an agenda item(s), then they are marked as absent for the vote(s). If councilmembers are in the restroom during a vote, they are still marked as absent—so best to monitor one’s intake of water.

Every level of government has official legislative/committee meetings and attendance is the minimum requirement. However just because one elected official wants to leave the meeting does not mean everything should come to a stop. If you need to go, then go, but leave it at that.

Many wish that the actual council meetings were shorter than they are today. The bulk of the council meeting is actually the unlimited discussion by council and mayor. On the other hand, public discussion is limited to two minutes and sometimes only one minute per each speaker. While members of the public speak, each Councilmember has that ability to view a timer that tracks the speaker’s time till you hear the famous words, “Your time is up.”

In the U.S. House of Representatives, members are limited in their speaking time. For example, members are given five minutes for committee meetings. So, rather than limiting the amount of time that the council or mayor may speak, perhaps the same timer used for the public should be allowed to run, tracking how long a councilmember, mayor or staff has spoken or is still speaking. This would allow for more concise and direct dialogue rather than circuitous speeches.

For example, tomorrow the council will burn a couple of hours discussing county and state ballot initiatives.

If you are the type of person who dislikes meetings, then I would discourage you from seeking elected office.

For over 10 years, San Jose has been struggling with implementing a Habitat Conservation Plan (HCP). HCP is a regulation imposed by the Federal government to restore natural habitats and preserve wildlife, like the spot checkered butterfly and the burrowing owl. HCP is an unfunded mandate from the Federal government levied on local government. Federal agencies are not big on waivers or tweaks, as they have one goal and that is the regulation and job security.

The main premise is that any and all new development—even if rebuilding an existing structure—would pay a substantial fee under an adopted HCP. This fee would create yet another hurdle for economic development in the name of saving wildlife. To some, this may just be fine since wildlife may have a higher value than economic development, like jobs. To others, they may not care since much of the wildlife in San Jose actually resides in much of California. Relocating burrowing owls, for example, within the existing city infrastructure to outside the city is frowned upon.

For others, who would rather see near zero development in San Jose, they will very much enjoy the potential outcome of a HCP. The implementation of a HCP would potentially cease development and have San Jose become more expensive than surrounding cities like Santa Clara, Sunnyvale and Milpitas. Now that we have an adopted General Plan that emphasizes development of land for jobs, this is a great time to encourage economic development. However, with this new fee, San Jose could lose out on new job growth, and, as a consequence, tax revenue. The cities to our north in Santa Clara County are exempt from the HCP, because they are built out and San Jose, on the other hand, is punished for implementing a green belt. The HCP would include Morgan Hill and Gilroy.

Other areas like San Diego have enabled residents to decide this question by taxing themselves via sales tax or parcel tax. The premise of the HCP is that there is a high value to preserving the natural habitats of certain animals and restoring habitats. If it is such a high value, then residents may choose that value when they vote to tax themselves for that value. If it is not highly valued by the electorate, then we will have to go down the road of taxing all future development to pay for the sins of the past. Implementing the plan at one point would have cost $1.2 billion, and it has been scaled down to $660 million. I would propose this question be placed on the 2014 ballot.

If nothing was done, Federal agencies would not approve permits for new construction. New construction creates water and that water must go somewhere like a storm drain—and that requires federal approval. It could also block public infrastructure improvements, such as a bridge or rebuilding of theWater Pollution Control Plant. Coyote Valley and the Almaden reserve are areas that provide ample land for habitat. Building within the city infrastructure is the prudent thing to do, but not if the tax is so high or a burrowing owl is on a parcel within the city existing city infrastructure, like North San Jose. For example, if HCP was in place today San Jose would have had to pay $170,000 fee for the Convention Center expansion. (Convention Center expansion is being paid for by the hotels, which have increased the hotel tax paid by overnight guests.)

The cost, $170,000, may not sound like much since we talk about billions all the time with Federal and State dollars, but at the local level that level of fee could dissuade new development, like the large office building the City Council unanimously approved for Santana Row last month. Another way to look at it is the city of San Jose has removed fees to promote building in downtown and North San Jose, and this new HCP fee would negate this effort.

I’m not sure how things became so disconnected between economic development and providing federal funding to comply with federal regulation. Be sure to ask your elected Federal representative. This topic will be discussed at this week’s council meeting.

Arts and Culture are words used quite often to describe the vibrancy of cities; particularly big cities looking to attract business, tourists and new residents. City folk have enjoyed arts and culture entertainment for centuries, which has been funded both privately and publicly. It is not uncommon for people to travel out of state and even internationally for festivals that explore various unique arts and culture.

Residents of a particular region will usually travel closer to home to experience arts and culture. For example, people in the Bay Area drive over an hour to San Francisco (SF) to partake in the Arts. For many of those that seek out the Arts in SF, their first thought is not about the city’s crime rate or road conditions but rather about the entertainment. They will spend $20-$40 on gas, their time driving back and forth, $20-$30 to park, and in some places navigate the sidewalks through panhandlers, alcoholics, drug users, drug dealers, etc. to arrive at a venue to be entertained and escape from their daily lives.

I have traveled north many times to see unique art, one-of-a-kind venues and paid handsomely in time and money to experience it. However, I value art closer to home without all the obstacles and safety concerns. Last week, I was able to enjoy the world premiere play, “Death of a Novel.” What a fantastic show with a full house at our own San Jose Repertory Theater. Powerful monologues, witty banter and racy material all in our downtown.

A criticism of the classic Arts like theater and opera is that the audience is mostly geriatric. Well, if you ever have been on the fence about seeing a play, this is the one to see. For those under 50 who may have been turned off or simply not interested in theater, this is a show for you. The play ties in social media, deception, profanity, sex and a story that you are not sure how it will end.

In San Jose, we are very fortunate to live in a place where people have devoted years of their lives providing entertainment for the region bothDowntown and other locations, like the new Renegade Theater Experiment in the Rose Garden.

This week the Zero1 Biennial returns to Downtown displaying art and technology on a grand scale. The last Zero1 Biennial in 2010 attracted 47,000 visitors to Downtown, which resulted in a great crowd, full restaurants and hotel room nights. Zero1 is funded mostly by foundations and corporate sponsors, however, the city of San Jose has allocated $68,000 from the $13.1 million Hotel Tax fund. In past events, ZeroOne artists like the Rockwell Groupare famous for lighting up the City Hall with interactive art comprised of lights.

With all the madness and chaos cities face across the country with reduced revenues and reduced services, this does not stop the individual resident from pursuing their intellectual curiosities or experiencing sheer escapism through entertainment. As humans, we seek many different facets in life beyond shelter and food. One of which is connecting with others in the physical world and enjoying a common experience providing a cultural literacy that we can discuss and relate to one another. In a small farm town it may be a barn dance; in San Jose we have a substantial variety of arts and culture.

If you would like to volunteer at the San Jose Municipal Rose Garden then join me and the Friends of the San Jose Rose Garden this Saturday at 9am. This particular volunteer effort will be done in the memory of Ivan Kolte. Ivan was a 94-year-young San Josean who loved the Rose Garden and passed away recently, joining his deceased wife and high school sweetheart.

When I was a kid, I would watch the old 1950’s show, The Honeymooners. I remember one scene where the main characters, Ralph and Ed, were talking about future vocations for their children. Ralph spoke about his child going to college, while Ed said—if he had a boy—that he would get him a job working with him side by side in the sewer. At that point, the audience laughs and Ralph’s eyes bulge out. He yells that Ed is nuts for suggesting a career in the sewer.

Although parents and their children may not always agree, more often than not parents only want the best for their children. For example, it is not unusual for a parent to want their child to be a doctor or a lawyer because these occupations often offer prestige, autonomy and good pay. These occupations require an academic education rather than trade school. The 1967 film “The Graduate” comes to mind when Mr. McGuire says to Ben, “Just one word. Are you listening? Plastics. There is a great future in plastics.”

For many high school graduates, college may not be pursued. Like Ed in the Honeymooners, many in society are employed in vocations that use a trade and/or manual labor that is also mentally challenging.

Last week, the City Council approved spending money from sewer fees—not the general fund—to hire a private company for the next year to assist at the Water Pollution Control plant. These private contractors will be used to augment city staff and do tasks that current city employees will choose in the near future not to do. The contractor will also provide relief for city employees to take vacations.

In 2007, when I started on the council, I heard over and over again that the plant employees were predominantly baby boomers and that getting new staff would be a challenge. Why though? Is it not just like filling a job in any other organization?

This takes me back to the Honeymooners analogy. Out of the general population, not many people were pursuing working in the sewer system because society did not deem it a positive career. We do know that these positions require a learned skill set over time and the jobs pay well and it is literally lifetime employment.

The general public has become more interested in sewers with the connection to keeping our environment clean. I believe individuals may choose a previously overlooked vocation in the sewer system once they understand the salary and job security. However, this will not change in weeks or months; it will most likely take time to garner the skill set for senior positions.

As I have written before, there is an opportunity for veterans returning to the USA if they choose to obtain work with the city. Or, perhaps it is the chronic unemployed who get laid off during every economic downturn and want more stability. Perhaps a better use of an outside contract would go to a company to help the city set up an apprentice program, so people with entry-level skills could learn the ropes and all the positions are permanently filled.

In an organization like the city, which has thousands of employees, 11 unions and a litany of job titles, it is nearly impossible to pay certain positions more within a union because it requires negotiation. If one job classification has people who work in the Water Pollution Control Plant and also work in City Hall, the increased salary must go to both even though they are inherently two different jobs. In any other organization you could simply raise the salary of that specific job, but that is not the case in municipal government. This instead must be dealt with in the long, arduous and secretive meet-and-confer process with the union.

Issues like this one would seem to be an easy matter, where the discussion could be held in public so we could get to “yes” faster and allow everyone to understand the details easily.

Santana Row is a unique place that draws people from outside of San Jose and has people talking about it across the country. People I know who typically did not visit San Jose years ago do frequent Santana Row today. The same visitors spend money while enjoying themselves in the 95128 zip code. The cultural diversity at Santana Row is amazing, with nearly every nationality represented and many first-generation immigrant families strolling The Row day and night.

To some it is a “Disney Downtown,” because it was fabricated from the ground up. To others it was a development that slowed down the potential of our own downtown. One could argue that an expanded Valley Fair mall did more to impede retail growth in downtown.

To me, Santana Row is a success. As much as I enjoy urban centers like our downtown, I also enjoy the sheer intensity of Santana Row with approximately 1,000 on-site residents and a hotel, offices, restaurants, marquee retail, movie theater, tall buildings, etc. All of these things together make Santana Row unique.

I have heard Santana Row brought up many times in reference to urban planning, and that it is ideal for pedestrians—there something interesting to be seen by the walker. Residents across San Jose often voice opinions about potential new developments in their own neighborhood and ask if they could get something like Santana Row. It would be nearly impossible to replicate, however, the principle of significant housing over retail and office is a good one and promoted in our newly adopted General Plan.

The millions in sales tax revenues generated from Santana Row is often discussed and the good fortune it brings San Jose. One example is when people buy a Tesla car from the store at Santana Row. The Tesla store at Santana Row has broken foot traffic records and is second in the world for actual sales of the electric car out of nearly 20 stores worldwide. The assessed value of this parcel and surrounding parcels skyrocketed through private development, which brings property tax revenue to many levels of government.

Besides direct sales tax and property tax revenues, Santana Row provides the opportunity to capture high-paying jobs through the development of substantial new office space. On Tuesday, the City Council will consider approving a large office building at Santana Row instead of housing. This new 240,000 square foot office building will provide an attractive option to companies locating in San Jose. Some companies will view Santana Row as a perfect fit for their employees and clients, because they can simply stroll to great amenities. Also, the opportunity for a company to have its brand shown with massive visibility is better than an office park.

As other cities to the north have developed new office parks, this impedes San Jose’s ability to draw in new, fast-growing companies from the peninsula that are searching for office space. The new office parks to the north entice companies that are looking for new space that in the past would have gone to North San Jose. However, Santana Row is a true differentiator, as the new office parks in other cities have virtually nowhere to go for the employee by foot—only by car.

The net new job potential of Santana Row is why I strongly opposed the rezoning of land last year from commercial to residential adjacent to Santana Row. Keeping the space open for business provided another opportunity for a potential corporate headquarters.

At the upcoming Aug. 7 City Council meeting, the discussion will focus on how to prioritize city spending IF revenues increase. So, in the example below, if revenues increase by $10 million—either by revenue growth or tax increase—this is how I think it should be spent by percentage. We will still be spending money on all of the city services included in the current budget, however, this example is for future potential revenue that is above the budget passed in June:

There is no extra allocation for the Fire Dept., as Fire Chief William McDonald and staff have been successful in obtaining federal grants. Federal grants are great in the short term, but they will make it more difficult to allocate future funds to hiring police officers—which is why the majority of future revenue is allocated to police. In addition, I agree with the 2011 Santa Clara Civil Grand Jury that San Jose could utilize three firefighters on a fire engine like every other city in the county. The data in San Jose shows that calls for service are 4 percent structural fires and 96 percent non-fire calls, mostly medical. Any cost savings from realigning resources to match call data should go to police.

We need to allocate general fund dollars to the Planning Department rather than increasing and relying on fees. Development can be sped up this way, increasing our tax base and private sector employment base to fund city services. Funding of Code Enforcement to keep our city safe/looking good and also could bring in revenue by assessing fines to irresponsible property owners—especially apartments that are ill kept.

Adding some funding to libraries is good, but much more can be done with volunteers to keep the doors open than is done today.

One way to make San Jose more visually attractive is through more tree planting, including maintenance, which also has other positive environmental attributes. Putting 5 percent aside to pay down high interest debt and save for a rainy day fund is prudent. Allocating something, even though small for Information Technology, must be done to achieve efficiencies and put a down payment on upgrading the financial software of the city to enable more sharing of financial information with the public.

The city manager, as chief operating officer, needs flexibility in allocating funds where the council or general public may not be aware of the need today. Of course, any action should require Council approval, but 10 percent between so many different needs may not provide enough. The city manager will have to make do.

The water treatment plant in Alviso will soon be able to make wastewater potable. Robert Dawson photo.

Last week, the City Council moved forward with an Environmental Impact Report (EIR) for the water pollution control plant often referred to verbally as “weepeeceepee” (WPCP). The plant and the land are jointly owned by San Jose and the City of Santa Clara.

There are competing interests on what to do with the area surrounding the plant. Some would like all of open space land preserved for natural habitat for the burrowing owl and other animals. Others would like to the area devoted to large parks with trail connectivity. Still others look to this as an area where San Jose could add office and retail opportunities to increase the tax base.

A permanent decision will most likely not be made until the EIR is completed in a couple years. However, what we do know now is that we must spend some money on updating the WPCP so that it continues to work and comply with federal regulations.

Perhaps with such a great land mass, there might be something for everyone? Would it be possible to have land for jobs, open space and a park? Do we try to please everyone or choose one option and stick with it?

Speakers from Alviso spoke about their concerns regarding added traffic to their area and shared concerns that any new retail would take away from the limited existing retail that is currently in Alviso.

This area is also where the advanced water treatment plant is being built that will take waste water and turn into clean potable water. Actually, this water will be cleaner than current tap water and certainly bottled water. This simple fact is important in the education process of consumers in water consumption. It is expected to open in June 2012.

Staff shared an extensive power point at the council meeting that I have placed on my council website as I have done with other staff presentations for you to view. The presentation is more visual and perhaps easier to understand than a long report so I encourage you to click on this link: City of San Jose District 6 Staff Presentations. From there, click on Water Pollution Control Plant Master Plan: April 19, 2011 to view and learn more. This power point is the bulk of this weeks blog. Appreciate any comments you can provide from what you discern on the power point presentation.

On another topic, the District 1 and 3 budget meetings had comments from actual residents this week. To summarize, people wanted the council to fix the structural budget problem so we can restore services in the future. A woman at the District 3 meeting, who is a volunteer at a community center, said she and her neighbors understand that the City has no money and to “Just do your best and God bless.”

Last week the council took up the firefighters union contract with more than 100 firefighters in attendance. I thought I would share why I voted no.
First, I think it is clear that if you have worked in city government over the years that things are drastically changing due to structural budget deficits. Second, if you are new to working in city government, you will most likely not have the same career as those before you.
I remember when I was a candidate for city council and meeting with the fire union. We covered a variety of topics but I always remember this question: “How would you help us with city management on wage and benefit negotiations.” I recall saying that I would attend the union negotiations myself. They were quite happy and said that was a great response. However, the firefighters union did not inform me then of the reality that labor negotiations are not open to council members.

I appreciated the 10 percent concession and was surprised that it did not go through binding arbitration. I believe the new interim president of the union is a sincere person.

Even with the 10 percent and after vacancies and retirements, we will still lay off more than 30 firefighters. However, the larger item which remains is minimum staffing for fire engines. I have brought up the minimum staffing issue in council meetings, committee meetings and budget meetings.

The LAFCO report on all Santa Clara County fire departments shows that San Jose is the only city in the county that has four firefighters on an engine. Also looking at the same report it shows we have an over 25-to-1 ratio in calls for medical vs. fire.
I believe we should lower the amount of medical calls when council approves the ambulance contract with the County. County government, by state law, controls the ambulance contracts. We should stop having our fire fighters respond to calls that are not necessary, like those at the county jail, since they already have medical personnel at the jail. In addition, low priority alpha and bravo medical calls should be left to ambulances.

Other cities as mentioned above are able to make do with three on an engine. We may want four on an engine and we may even want five, but we cannot afford it. This does not mean every engine would have three instead of four, as not all stations are equally busy, and therefore it provides the flexibility to keep stations open. Residents are not so concerned if there are three or four on a engine, but they do care if the station is open or closed.

Because of minimum staffing requirements in the recently accepted fire contract and the unavoidable layoffs, we would close fire stations.

Back in 2008, when Station 6 was a line item to be sold in the city budget with zero notification to residents, I initiated the policy passed by the Council that mandates mailed notification to residents and two evening public meetings with the presentation of data for the primary service area when fire stations are proposed to be closed. Most importantly, it does not allow a station closure to be included in the budget prior to the prescribed outreach. Before this policy fire stations could be sold/closed with no notice.
So like the Communications Hill neighborhood, which now has a closed fire station, other fire stations somewhere in San Jose will need to be closed due to minimum staffing. It is unfair to residents that we close stations when they can remain open with one less person to maintain response times based on distance.

If the council does not want to see fire engines taken out of service than we will need to makes cuts elsewhere. The most likely place for those cuts will be our police department, with the laying off of police officers.
We do not have a minimum staffing requirement applied to police cars for police officers. If police run short on a shift they do not say “let’s stop patrolling in Almaden or Berryessa.” We do not have minimum staffing for our libraries. We do not have minimum staffing for our planning department to process an application for development.
This comes down to what is most important for San Jose in 2011 with the limited taxpayer dollars that are available to allocate. For me the answer is simple. It is police. Police enforce the social contract. No one else does.

The social contract allows individuals to be free from harm and intimidation.

The social contract allows the weak to be protected.

We cannot do everything. In fact we can’t even do both…police or fire. So we have to choose.
This fire union contract makes the fire department the number-one priority in the city budget by maintaining minimum staffing on fire engines. I cannot say this is my number-one priority nor my residents’ number-one priority when we provide multiple services to residents.
With that said, I vote against funding charities even when they are great organizations; they are not in the city charter. In addition to voting against the Hayes Mansion, golf courses, million dollar IT projects gone wrong or championing $1.475 million in cost avoidance on a current IT project. I voted against $1.3 million on golf nets, rezoning industrial land to residential, affordable housing that does not pay property tax. And I support outsourcing of services like janitorial to save money for core services.
I think it is wrong for myself as an elected official to make promises to every group or specific union when the reality is restricted resources do not allow promises to be kept.

The 2010 Census data came out and the good news, from my perspective, is the population of San Jose is not one million people but instead 945,942. However, I am told there is under-counting as some residents do not want to be counted. Our population growth rate has slowed to 5.7 percent as opposed to 37 percent in the 1970’s. The average people per household city wide is 3.14, however the average number of people per household in District 5 is 4.5.

This census data will be used by the Redistricting Advisory Commission to make suggestions to the City Council on how the council district boundaries should be redrawn. Each Councilmember appointed a district resident to the commission and the Mayor appointed the chair. The goal is to have the Council districts relatively even in population by plus or minus 5 percent. The commission may take major boundaries into consideration like freeways or railroad lines, as well as non-physical boundaries like school attendance areas. The commission is having a public meeting tonight (March 14) at 6:30pm at City Hall to the discuss the data.

The council district populations as of the 2010 Census are as follows:
District 1: 88,645
District 2: 92,314
District 3: 93,896
District 4: 102,976
District 5: 90,863
District 6: 100,236
District 7: 97,868
District 8: 101,108
District 9: 88,853
District 10: 89,183

Council District 1,9 and 10 will expand boundaries to gain population while districts 4,6 and 8 will contract to lose population. For example, District 4 would need to shed an area that contains 3,652 residents while District 1 needs to expand the district to gain 1,219 residents. Whether it is expansion or contraction some residents will get a new councilperson. I have found for some residents this is a big deal and for others it does not matter. Would it matter to you?

The 2010 Census also tracks data on race and uses terms like White and Hispanic. District 9 had the highest White population. While District 4 had the highest Asian population and District 5 the highest Hispanic population. Districts 2 and 6 tied for the highest African American population.

Should the redistricting commission recommend that Council district boundaries are changed to achieve nearly equal distribution by race?

The Mayor’s budget message is quite serious in the challenges we face. As we look at the devastation in Japan I believe it is important to not drain our limited financial reserves in case of a natural disaster in San Jose.

After much discussion at the City Council meeting last week the Council voted in favor of having city staff study performance as a criteria when it comes to employee layoffs.

The review will determine if the City should include job performance when considering layoffs, or keep the current system in place, which is based solely on seniority. Due to budget shortfalls, the City has eliminated “vacant positions,” which were budgeted with the intention of hiring someone to fill them. Elimination of those positions generated savings, since the savings came from no longer budgeting for the positions.

As a result, the City is forced to do layoffs, based on seniority only. For example, you may have someone on the job for nine years who is under performing yet someone who has been on the job for six years and is a great worker. The person who has been with the City for nine years will “bump” the better performing employee, in the same or different department.

In some situations the person going into the new position does not have the skill set to do the job. This causes disruption to that department and disruption to the client (residents, business,etc). For example someone who has never stepped foot in the water pollution control plant now has a job at the plant, which requires a special skill. Skill sets and domain expertise are lost when people bump to other departments based only on seniority.

There are two points which I think get overlooked in this debate. One: My proposal does not eliminate seniority as a measurement but instead adds performance as a factor. Whether performance will be 10 percent or 20 percent of the total criteria remains to be seen. We may eventually also decide to include education and certification as well. We need some way other than months on the job to make a informed decision.

The other item being overlooked is that performance should be considered when getting a raise or a promotion—not just the current situation of layoffs. Today, salary step increases are rewarded only based on seniority. Adding performance as a criteria should also be considered.
In addition, city staff will study the current evaluation process, which has not always been followed. Some say that evaluations do not matter since the current system is only based on seniority. I would personally be interested in a affordable software evaluation solution so that HR can track all evaluations in real time, and that there is a standard format with the option of allowing some customization of questions for specialty jobs.

I am surprised that this issue was not resolved in prior decades and that there is strong opposition from the leadership of public employee unions. Several city employees in different departments have mentioned to me that it is disappointing to work with someone who does not carry their weight. This is about civil service rules and not about unions, however there will be a lengthy meet-and-confer discussion with the 11 unions. In comparison, the numerous building trade unions do not have seniority and bumping. Union trade members are hired and fired based on work performance.

Seniority is being raised also in Los Angeles, where the ACLU has won in court against the school district, by Mayor Antonio Villaraigosa, a former teachers union organizer. “We cannot continue to automatically guarantee lifetime employment to all teachers,” Mayor Villaraigosa said, “nor can we make decisions about assignments, transfers and layoffs solely on the basis of seniority. Tenure and seniority must be reformed or we will be left with only one option: eliminating it entirely.” If a former union organizer and now Democratic Mayor of California’s biggest city can support performance evaluations, plus 79 percent of San Jose residents, so to should the San Jose City Council.

Congratulations to Arizona-based Microchip Inc, a veteran semiconductor company. They recently located their Silicon Valley office to San Jose from Sunnyvale filling up 100,000 square feet in North San Jose.

Saturday, the Willow Glen Rams defeated the Burlingame Panthers for the division two boys varsity soccer championship. It was first championship soccer win for Willow Glen. Congratulations to Julio Morales who scored two of the three goals.

In past blogs I have expressed my concern about the cost to our city of too much housing. Specifically, housing that does not pay its own share of revenue. One example I have pointed out—and constantly been the lone vote against—is affordable housing.

We run the daily operations of our city with tax revenue. The city does not write paychecks signed “goodwill” or “number-one provider of affordable housing,” but rather with dollars backed by tax revenues. So when we add to the housing stock by approving, for example, an affordable housing project that does not pay property tax, road-paving fees and only 50 percent of park fees, it is a net loss for our city. Therefore existing residents subsidize city services for the new residents.

Annual property taxes in San Jose are needed to pay ongoing salaries and benefits of employees. Road-paving fees go towards paving streets in San Jose. If you ride a bicycle or drive a car you know that we need every dollar. Park fees allow for new parks or increasing the size of current parks so we do not wear out the existing park infrastructure in established neighborhoods. For years developers were exempted from paying park fees for affordable housing projects which created more residents but not enough open space. However last year with the support of the city council I managed to get it changed to where developers must now pay half the park fees that market-rate housing pays.

The other item of interest is that affordable housing generates extraordinary calls for service from our police. Attached is a snapshot of data for eight affordable housing developments in San Jose and the calls for police service. Since there are more calls for service around these affordable housing projects, over time our police department may schedule more police in this area to manage those calls. This may translate to less police coverage in other areas of San Jose, perhaps where you live. In addition, our fire department receives more medical-related calls, and again there’s no tax revenue to pay for the employees.

So we pay twice. Once, by exempting taxes and fees. Twice, by higher use of city services than existing residents. (Also, most of these projects were financed with RDA funds, and the State of California mandates that 20 percent of that money be spent on affordable housing. And many of these projects were put in places zoned for jobs and not housing.)

Out of the many suggestions I have made on this topic I believe affordable housing developments that have too many calls for service should hire an off-duty officer and/or ambulance to be there on site.

On another topic, one of my favorite Downtown events starts Tuesday night, The Cinequest Film Festival. Check it out at Cinequest.org.

Related to cinema I obtained a documentary film about urban parks directly from the filmmaker called The Olmstead Legacy. Monday, March 7 at 6:30PM will be the premiere showing in San Jose at City Hall. Find out more about The Olmstead Legacy here. The film will be followed by a discussion on urban parks. The event is near capacity; please email me if you want to reserve one of the remaining seats at Pierluigi.Oliverio@SanJoseCA.gov

Finally, the bipartisan Little Hoover Commission, an independent state oversight agency, made its recommendation to Governor Brown about pensions last week:

In my opinion, the Council made two great investments two weeks ago for our tax base and jobs. The Council provided $500,000 of Redevelopment Agency (RDA) funds each to Sunpower and Maxim, totaling a one million dollar investment for economic development. These two companies compete globally, therefore they could have chosen any other location in the world.

Maxim, a billion-dollar semiconductor company, will consolidate its offices and relocate its corporate headquarters from Sunnyvale to North San Jose. Maxim has design facilities all over the the USA and the world.

Sunpower will double its headcount to a payroll of approximately $75 million in San Jose instead of Texas. Texas offered Sunpower $4 million. Sunpower could have also expanded its Malaysia facility and been exempt from taxes.

We can’t ignore that we are competing at a global level and the fact that San Jose was able to have these two companies call us home after the Great Recession is an accolade. Although I do believe RDA has lost its focus from time to time, this kind of economic development is right on target.

The County of Santa Clara is upset with these two investments, issuing a letter to the City of San Jose citing Sunpower and Maxim specifically. This is the same government agency that says time and time again that they want job growth in the County; especially green jobs. The saying “action speaks louder than words” comes to my mind here. The County will benefit from these investments as the majority of Sunpower and Maxim’s employees will have homes in the county paying property tax and sales tax, of which the County government gets a significant portion.

In contrast, the Council funded the construction costs for an existing charter school in East San Jose with $950,000 of RDA money. So, is one million better spent for economic development or a school? Neither economic development nor schools are in the City Charter. Do they provide the same measurable return on investment?

RDA did fund the extensive remodel of the existing Horace Mann elementary in our downtown 10 years ago when there was more cash on hand. Horace Mann was an eyesore and is now a very attractive school. Part of the thought process was for downtown to have a good public school for young families. I think the Horace Mann PTA would agree it has benefited the school community. On the other hand, the money spent did not generate any new ongoing jobs or revenue for the City.

Council could have directed the million dollars to fund more affordable housing, since that is funded by RDA, or another million on top of the $73 million RDA has spent on the Strong Neighborhood Initiative, which benefits a fraction of San Jose.

Finally, important to note is that long ago RDA funded a bridge and light rail station in North San Jose next to then-small company that relocated from the Peninsula. That small company was Cisco and is now the largest private employer in San Jose.

The City of San Jose has adopted Civil Service Rules that state what is and what is not allowed in regards to employment. The City Charter allows for changes to Civil Service Rules by a Council vote, and does not necessarily require a city-wide election.

SECTION 1103. Civil Service Rules; Manner of Adoption.

Civil Service Rules for the Classified Service shall be adopted, and may from time to time be repealed or amended, by ordinance of the Council. Upon adoption, Civil Service Rules shall have the force and effect of law.

The Council may adopt, repeal or amend any Civil Service Rule for the Classified Service, provided it first receives from the Civil Service Commission a report or recommendation with respect to the proposed new Rule, if a new Rule is proposed to be adopted, or with respect to the proposed repeal or amendment of an existing Rule if an existing Rule is proposed to be repealed or amended; provided, however, that if the Civil Service Commission refuses or fails to submit to the Council a report or recommendation on any proposed new Rule, or proposed repeal or amendment of any existing Rule, within ninety (90) days from and after the date the Council requests such a report or recommendation, the Council may adopt such new Rule or repeal or amend such existing Rule, without first receiving a report or recommendation thereon from the Civil Service Commission.

The years ahead for local government will be tough, as property tax revenues will continue to be low and the true costs of pensions are revealed. If layoffs are inevitable, then let’s examine the current system of layoffs by seniority.

The current method means we lose some of the most productive people and create a large age gap if/when we are in the position to hire down the road. Instead, perhaps we should look to see if there is an alternative that might involve employee performance as well as seniority. Maybe only lay off employees who are evaluated as “needing improvement” before laying off productive employees with less seniority. Or if two employees have nearly equal seniority, leave some allowance for merit—such as education, training, evaluations and certifications—to be used in the final determination.

Also, we should explore allowing those that are closer to retirement the ability to choose on their own accord to retire early in a way that would still provide the savings to balance the budget. Employees with more seniority are paid more than those with less seniority, so a change may allow fewer layoffs of city employees that provide services to residents.

I believe the Civil Service Commission, chaired by Bill Brill, business representative for IBEW union Local 425, should review and give their recommendation to the City Council in 90 days per the City Charter.

Thanks to Friends of the San Jose Rose Garden who hosted a great volunteer event on Saturday. Many unpaid volunteers braved the cold to help keep the park looking great. Special thanks to Terry Reilly, Beverly Rose Hopper and Myles Tobin for the heavy lifting.

More than a year ago, the San Jose City Council was presented with renewing its Microsoft desktop licenses. This can be an expensive line item. We have spent over seven figures in the past for licensing alone on this item. I thought to myself, and later spoke at the Council meeting, that there is no real competition for this purchase we were about to approve and wondered if we could do better. In the end, we got a government discount from a Microsoft reseller, but it was not truly competitive since Microsoft did not have any competition at City Hall.

Do you remember how Netscape used to sell web browsers? Fast forward, and now, with competition, web browsers are free. So I thought: Why not inject direct competition for our email and Microsoft Office applications? Google offers free email, calendaring, documents, forms, spreadsheets, presentations, etc., in a Software as a Service (SaaS) model—also called cloud computing.

With competition I think we may get a better price next time we renew. Or we may find a solution where we discover more value. So outside of price, since Google is free, it’s a good deal (one can pay a small annual subscription for customer support). But there are other attributes as well.

First, one does not get stuck on old software, since Google is SaaS, which constantly updates the software. As a result, your information technology (IT) team does not have to update the server and the individual computers for upgrades and bug fixes, keeping your internal IT costs down. Also, an organization is not dependent on the IT person who runs the Microsoft exchange server. In most cases, if the person responsible for this item leaves, then the organization will have big problems. Google makes it much easier to manage, thus the city would not be dependent on a specific IT person. Google also allows for improved public records act requests by simply searching every email with keywords.

Personally, I enjoy collaboration via Google Apps in being able to share documents in the cloud (no vpn needed) under revision control with others in real time. It also allows the author to share or edit the document. No more going back and forth, sending endless emails with out-of-date revisions of a document.

At our Dec. 14 meeting the City Council approved a 12 month pilot of Google Apps that I initiated. There is no cost or obligation to purchase. We look forward to competition for our city dollars. (I do not own any shares of Google.)

It is that time of year again, with lobbyists circling City Hall in preparation for the General Plan hearings.

With the leadership of Mayor Reed, modifications to our General Plan (GP) have been reduced to once a year, for the most part. At the GP hearings, applicants make their case as to why current land-use designations should be changed to allow for the applicant to build what they want, regardless of how the land is currently zoned.

These “conversion” requests are typically for land that is industrial/commercial to housing. Or it could be extending the urban growth boundary to allow for more suburban sprawl. By the way, San Jose currently has over 21,000 units of housing approved and entitled on land zoned residential that has not started construction.

With more conversions of our industrial, commercial and retail land, we are pecking away the tax base a little at a time, which narrows our future options down the road.

Either you view San Jose as a dead city with little chance of economic growth (so go ahead and convert each proposal put before you because it doesn’t matter), or you have the view that there is future potential for San Jose to bring more small business and large business. I feel San Jose has not reached it’s potential but will be severely handicapped if we allow death by a thousand cuts when it comes to land use. San Jose will be fighting for a smaller piece of the economic pie in the United States as globalization continues and our national debt reels out of control. San Jose should control it’s destiny by standing firm in not changing land-use designations to housing.

At the budget hearings on Nov. 18, I shared that I would have a very difficult time asking employees for wage concessions if the Council cannot hold the line on the conversion of employment land. Seems only fair: If you are going to ask someone for money to pay your utility bill, don’t leave the furnace on all day when you’re at work. The Council has had to tell residents and employees “no” this fiscal year because of past decisions. I cannot and will not jeopardize more city jobs that provide services with conversions that hurt our future tax base.

One of the proposed exceptions that the Council denied in May 2008 on a 6-5 vote is back again with a different lobbyist. The same property owner also owns land where the proposed baseball stadium would be located. I met with the property owner representatives who said if the City would rezone this piece of land then they would consider selling the other piece of land to the City for baseball. I believe each rezoning should be judged on its own merits and not tied to a quid pro quo. I wrote about this property the last time it came to Council.

Exceptions to our General Plan (tax base erosion) will be heard Tuesday, Dec. 7, not before 7:15pm. I would be impressed if more than one person, whether it be city employees or San Jose residents, would speak at the Council meeting and simply say, “hold the line—please do not convert our future tax base.”

Congratulations to the Willow Glen Rams winning the CCS Division 2 Football championship over Sequoia of Redwood City. An incredible season that rallied the school and neighborhood. The star quarterback is the son of my classmate and friend from Willow Glen High. Sadly, my friend passed away from cancer several years ago however his son is the spitting image of his father, which makes it a very special victory.

Last Thursday, the council had a study session for San Jose’s 2010-2011 budget. The public meeting received little media attention. Perhaps, since the holidays are near, we only want to hear the good news…and next years budget is far from good. There is no dispute on the data—just the direction we shall choose to balance the budget.Here is a link to the 88 page presentation given to Council by the budget office. (Click on “2011-12 Organizational & Budget Planning” to view the presentation.)

The Council was challenged by the grim financial data and gave direction to continue with the 10 percent total compensation cuts that was requested last year. This is not an additional 10 percent but rather a request to keep the current 10 percent concession that was already agreed to by some of the labor unions. The 10 percent concession that several of the unions agreed to last year were “one time only,” meaning only for this fiscal year (2010-2011) and not ongoing. The three largest unions did not accept the 10 percent reduction last year and one actually got a raise.

If the Council chose not to ask for 10 percent pay cuts and spare public safety we would layoff two of every five non-sworn positions. So two out of five librarians, attorneys, IT staff, finance, auditors, code enforcement, planning department, public works, department of transportation, economic development, community center staff, etc….This would result in 81 percent of the budget allocated to public safety. If however 10 percent total compensation cuts were achieved then 72 percent of the budget would be allocated to public safety. (Slide 32)

Outsourcing is back on the table as a way to reduce costs and keep other city departments from having more layoffs. Last year we outsourced janitorial services which resulted in a $4 million savings and the facilities are just as clean.

I made several statements from the dais that included:
• not converting employment land to housing
• eliminating discretionary funding of charities with Healthy Neighborhood Venture Funds
• not raising fees so we become uncompetitive with our neighboring cities,
• keep the jobs/revenue team in place for companies locating to San Jose,
• Council should be limited to how many memos (flavor of the day) for new policies they can submit in a year
• rank current staff workload on what is most important (selling Hayes mansion and getting out of golf business)
• allow for union negotiations to be done in public
• instead of closing fire stations or laying off police officers reduce staffing at the slower fire stations to the same staffing levels as our neighboring cities
• finalize a new retirement system for new employees
• new facilities not be opened with full staffing
• outsourcing park maintenance or look at outsourcing by attrition where we hire private contractors as people retire
• look at new revenues once Council makes the hard decisions
• over time look at taxes that have positive environmental results and not only focused on property owners like parcel taxes instead look at solid waste dumping fee and the utility tax (water, electricity & gas)

We are suffering from severe financial duress; however, we do have options, as I have shared above. Perseverance and goodwill are not dependent on budget numbers, therefore “this too shall pass.”

During the past few years, the City of San Jose has annexed 42 county pockets. These annexations came about in two ways. First, the State of California changed the law that made county pockets that are under 150 acres unable to vote on whether not they wanted to be annexed. Second, the County of Santa Clara had wanted San Jose to annex county pockets for years. San Jose avoided the topic until there was a court settlement with the County where the City agreed to annex a portfolio of county pockets from west to east based on the “sphere of influence”—lines that have been drawn for decades that indicate which cities county pockets would be annexed into.

By default, county pockets are different depending on their location and needs. Some county pockets have a high crime rate and gang activity while other pockets have an extremely low crime rate and no gang activity. Some county pockets do not have storm sewers, streetlights or sidewalks while others do have such infrastructure. The more affluent county pockets have higher real estate values and therefore bring in more property tax revenue to cover services while less affluent county pockets have lower property values and thus lower property tax revenues.

Last week, the city voted to annex the last under-150-acre county pocket in District 9 that is surrounded by San Jose on three sides, a combination of commercial and residential which is just down the street from the Camden Community Center. The commercial properties are along Camden Avenue and Bascom Avenue while the residential is tucked away in a neighborhood of single family homes in the $800K range. The majority of residents of this particular county pocket wanted to be annexed by Campbell instead of San Jose. They spoke at the council meeting to how they identified with Campbell and not San Jose since they liked a small-town feel and Downtown Campbell was closer then Downtown San Jose.

There was also a concern about response time for fire, so after further study it was concluded that County Fire, based on geographic location, would continue to better serve the residents. Therefore the current fee for the fire district on the homeowner’s property tax bill would continue to go to county fire so the service would not change. Due to the higher property value of the homes and the commercial land this annexation resulted in positive revenue for The City of over $230,000 per year. While prior annexations will cost the city money due to less revenues from property tax this one was positive. So going against all the speakers at the meeting the council voted to annex the pocket.

On a personal note, it was tough a tough vote for me since my childhood friend was the neighborhood association president for this county pocket and did not want San Jose annexation. It’s important for me to separate what is best for the city as a whole. If at any time I was told I could pick and choose which county pockets to annex, then I may have voted no on the pockets that were going to cost our city money.

I think if we were doing it all over again it would have been wise to annex the higher property value pockets first so we could bring in the revenue to pay for city services. Sometime in the future, and it is not known when, the City may annex the very large county pockets such as Burbank in District 6, Cambrian Plaza in District 9, two in District 7 and the massive county pockets in District 5 which would make up about a third of the entire district.

Last week, Council dove into a study session about street paving. As you may have heard, San Jose came in last on a national survey on road conditions. This survey was done prior to the $12 million in federal stimulus money that was allocated to San Jose for road paving this summer.

San Jose’s cost to maintain roads is high due to our suburban sprawl. Total lane miles in San Jose is double that of San Francisco, which came in second for worst roads.

San Jose has 2,370 miles of road (60 feet wide) that would stretch from here to Detroit! (Could you imagine if we continued on the notion to build out Coyote Valley and increase our road network plus the sidewalks, sewers, street lights and signalized intersections?) Those 2,370 miles of road are split between 1,570 miles of neighborhood streets and 800 miles of major streets. State and federal grants for street paving (if you get them) typically only apply to the major streets and not the majority of neighborhood 25-mph streets where we live.

Staff presented us with the dilemma that as streets wear down they are more expensive to repair. For example, to “reseal” a street in good condition may cost $35K-$70K per mile, however if a street is in poor condition the price rises to $200K-$800K a mile. Complete rebuilding of a street is the most expensive at approximately $1.8 million per mile! So transportation engineers do their best to with the limited dollars to try and keep streets from falling into poor condition.

Some streets are being left behind since they are so expensive to repair. So, thus a trade off: Do we fix one mile of a terrible street or instead 10 miles of streets that are in fair condition? Well, if you live on those 10 miles of streets it is great; however those on the one mile of terrible street are left behind.

Inevitably, the decision to repair, rebuild, etc., always turns to money. The city has lowered it’s road repair budget at the same time as other department budgets were being trimmed. As the structural budget deficit took hold and the portion of the pie chart for road paving got smaller, other portions of the pie chart, such as pensions, got bigger. One proposal on how to pay for the deferred maintenance backlog (streets only) of $250 million (which may swell to $1 billion by 2020) was an annual parcel tax of approximately $300.

A comparison is that many households pay $480 a year for basic cable TV or $600 for high speed Internet, so paying $300 for streets each year would be just be considered another household expense. The other factoid cited in favor of a parcel tax was that the annual cost for car repair due to poor roads is $700 a year.

Of course this $300 parcel tax was preliminary, and other parcel taxes may arise based on different properties, or a Council decision to charge a big-box store more since their store generates many car trips. Cities alone do not have the ability to raise gas taxes so parcel taxes, sales taxes or utility taxes are the main ways to raise revenue for ongoing expenses. Gas taxes make those who drive on roads pay for them; however some of the biggest culprits for wear and tear on streets—buses, garbage vehicles and commercial delivery trucks—are exempt by state and federal law from paying a fee to cities for the damage they cause.

One of my questions at the study session was: “Since the city council policy exempts affordable housing from paying construction taxes which go towards road paving, how much money have we lost and/or could have had in the coffers for street paving from affordable housing?” Unfortunately, staff did not have the answer readily available. I am aware that the city has lost approximately $80-$90 million for our parks with a similar exemption for affordable housing developers. My back-of-the-envelope calculation is we have lost out on approximately $30 million that could have gone to road maintenance.

I think it is important that we know these things since a council policy has cost implications. If we raise your taxes for road repair but then make exemptions for something else, then maybe the tax should be called an affordable housing tax instead of tax for roads or parks.

I remember sitting through many long speeches from my former colleague Forrest Williams who touted that money spent on this hotel and conference center instead of spending the money on police and libraries was appropriate. So, I wonder why are the people who support the No on V campaign endorsing Forest Williams, who was biggest proponent of the Hayes Mansion, in his supervisorial race?

I am thankful that the Hayes Mansion and its $4 million a year subsidy is being brought to light to all the voters of San Jose. However, it’s dwarfed by the $52 million taxpayers had to pay just for the pension loss last fiscal year. I can’t help but wonder where everyone was when I spoke about selling the Hayes Mansion in the past? Where was everyone when the vote was taken for taxpayer subsidized golf courses and when income-producing land was converted from industrial to housing?

It was also interesting that this mailer cited—almost as gospel—the Santa Clara County Civil Grand Jury Report titled “Money-Losing Hayes Mansion: A San Jose City Council Responsibility.” Apparently, this campaign supports the Civil Grand Jury as a trusted and reliable source. So perhaps they would then agree with other Civil Grand Jury Reports, such as: “Cities must rein in unsustainable employee costs” or “City of San Jose Hosed by IAFF Local 230 Executives” or “Los Lagos Golf Course—San Jose’s Financial Sand Trap.”

It is difficult for policy makers and interest groups to be consistent and this to me is an example of being inconsistent.

County Assessor Larry Stone visited the San Jose City Council study session last week and gave an extensive lecture on the role of the County Assessor and a critique of Spectrum Economics. His comments were blunt, sparing only profanity about the economist hired by the RDA for $15,000. I wrote about this topic three weeks ago.

This is the only time that another elected official has spoken to the City Council at length during my tenure. Mr. Stone explained how property values rise and fall. Property values change for a variety of reasons: when property is sold, new construction, Prop 13 adjustments, Prop 8 appeals, business property (servers, factory equipment) and assessment appeals. Revenues from property tax will not increase for local governments this year and may even fall further.

Those that are hopeful of more property tax revenue have stated that if a global corporation stock price rises then so should their property value. Assessor Stone stated that there is no correlation between the stock price of a single company and how much their commercial property is worth. His example was that if you got a raise or bonus that your own home would not increase in value.

I think next year we may want to forgo an economist and instead pick up the phone and call Larry Stone. To be fair, the assessor only looks back and does not offer projections; however he has a more informed view then most and the only cost may be lunch.

For the most part, I do not think people want things to change. However, could you see living without highway 280, 85, 87 or 237? When building large transportation projects there always seems to be opposition of some sort. Government at all levels—local, state and federal—deems that certain projects have a higher value in the long term.

A current public transportation project that has been receiving attention lately is High Speed Rail (HSR). Last week, the city council discussed whether the trans should run above ground or underground. The preferred choice among many in Northern California is to underground/tunnel the HSR. However, it appears that the majority of elected officials support an above-ground structure.

I have attended approximately 16 evening meetings regarding HSR. At first, the meetings were terrible with few answers and little data to answer audience questions. Over time, the quality of outreach and information has improved. It was through this process the HSR decided not to run the trains directly through the Gardner neighborhood, but rather hug highways 87 and 280.

To tunnel or not to tunnel is both a financial and timing question that includes geological reality. A tunnel from the Diridon station to the 87/280 interchange will cost an additional $800 million to $1.2 billion and may add seven years to the project. In addition, not every piece of land and what is beneath the surface lends itself to tunnel. Downtown has its challenges with sandy soil and a shallow water table. So, a piece of land in one city is different then another city, just as some parts of San Jose have streets that sink and others do not. (Wait till the Big One hits and liquefaction of soil happens in certain parts of San Jose.)

Some questions I asked at the council meeting were: “ How much does it cost to include a tunnel in the Environmental Impact Report (EIR)?” and “What more would we learn if the tunnel was included in the EIR?” The first response was “don’t know” and second response was hard to translate.

Another question I asked: “Where is the local money coming from since the City does not have any?” One response was “Well, maybe the City could make money from parking.” It sounds like we would have to find millions of dollars to build a parking garage and then promote driving your car and parking it over using public transportation—so my questions remained unanswered.

I believe our Mayor is doing a good job trying to manage an uncontrollable situation. Uncontrollable since the power in this decision does not rest with cities but rather with the state. I believe our state assembly and state senate have more power over a state agency then an individual city. We see that year after year the state takes RDA money from the cities.

It is highly unlikely there will be an underground tunnel due to cost and years and examples of issues that occurred with the “Big Dig” in Boston. Overall, I lack confidence on the HSR project since it will take $43 billion to $100 billion to build it out over time. To complete HSR will mean going back to the voters a few times for more money. I know from history that some projects take decades to complete, however you compound this on top of $500 billion in state pension liability and ask, “Where is the ability to pay?”

There is the hope to get a legal agreement with HSR that would allow San Jose to have a say in the architecture of an above-ground structure. There is good reason for HSR to agree since HSR would save money and years in construction. So if HSR would save $800 million to $1.2 billion, then they should allocate some of that money to San Jose for the architecture.

Everyone has a different view of what they like or do not like about architecture but we can agree on is that $100 million, for example, buys you some level of architecture. Since we know that the price tags on these projects grow and grow then we might want to assure a certain percentage of the build cost in that future year instead of an exact monetary figure.

On another topic, this week the council is posed to approve yet another rezoning of land to housing for an affordable housing project that does not pay property tax which has been the number one revenue for our city. How will we fund our police and libraries without property tax?

On April 18, 2006, the City Council unanimously approved the Guadalupe Mines General Plan amendment, changing the zoning from Research & Development to Residential. At that same meeting, the Council debated other industrial conversions along Old Oakland Road/Rock Avenue, and voted to convert all of the employment-land parcels that night to housing.

Now, four years later, on Aug. 31, the Council heard a proposal for housing on the Guadalupe site for 89 single family homes. The issue for many who spoke at the meeting was that this piece of land is against a creek and the city’s Riparian Corridor policy should be adhered to. (A riparian corridor is another term for a waterway. The purpose is to make sure that developments are not built right next to a as a creek, river, etc..)

Although the internet is great for providing maps and aerial views, I prefer going out to the sites of land-use items that are on the council agenda. I drove through the existing neighborhood across the street from the proposed development to know more about it, and finally drove and walked the parcel.

The thing that struck me is that I saw many parked cars. I looked up and recognized the name on the building, Monolithic Power Systems (MPS). MPS is a $240 million analog semiconductor company whose global headquarters are in San Jose. I went into the lobby, introduced myself and asked for the Chief Financial Officer (CFO). While I was waiting, I noticed people were coming in for job interviews. I later found out they had 11 open positions they were hiring for this location on top of the 160 current employees in San Jose.
I met with Richard, the CFO, and he gave me the history of the company which started in Los Gatos and then moved to San Jose. MPS ranks as one of the fastest-growing companies in Silicon Valley. The CFO told me they like the location and would really like to stay, but they understand they do not own the property. They like the location so much they offered to buy the building—and an additional vacant building, even though they did not need it to sweeten the pot. So they put in an offer for the market price for R & D office space and a housing developer put in a bid as well, based on building houses. We know that housing trumps jobs for the cost of land. So the private property owner chose the higher bid.

The CFO understands they will have to move, so I asked what about Edenvale or North San Jose? He responded that San Jose is not on the short list, as they have looked at properties in other cities based on where executive management lives.

Understanding the rezoning was done four years ago, I could not vote for housing knowing the city of San Jose would lose a corporate headquarters and 170 really well-paid jobs. As a result, I voted ‘no,’ as I did not want to associate myself forcing a technology company to move out of San Jose. My colleague Councilmember Kalra also voted ‘no,’ citing concerns from the dais about the development being too close to the creek. Final vote was 8-2 in favor of housing.

PS: I highly recommend seeing the documentary The Tillman Story at the Camera Cinemas. It is the story of San Jose native Pat Tillman. It is a must- see and good on many levels. Do not wait for Netflix.

The Rules Committee allowed my memo on Pension Reform to go before the City Council Tuesday, Aug. 3, to be considered as a ballot measure for San Jose voters this November. At the Rules Committee meeting, members of the public were few compared to the number of paid lobbyists that were in the audience.

I have a supplemental memo coming out today which will ask the Council to adopt the language below:

“To provide fiscal stability, control costs and maintain City services to residents, shall the Charter be amended to allow the Council, by ordinance and subject to the requirements of applicable law, to exclude any officer or employee hired on or after the ordinance’s effective date from any retirement plan or benefit of any plan?” (For example, this means we could exclude new employees from the 250% pension match.)

I have been a Councilmember for over three years and pensions have only increased in cost for residents of San Jose. The ability for the Council to have the flexibility and the option to negotiate a 2nd Tier would be a positive step for everyone involved, union members and taxpayers alike. Only through developing a new fair pension for new employees can we get to a point of trying to balance the structural budget deficit. However, during my three-plus years on the Council, discussions of 2nd tier always get postponed. “Kicking the can” is the easy thing to do, but San Jose can no longer pretend that our problems will go away.

Many of the union speakers at the Rules Committee last Wednesday mentioned that there needs to be dialogue, a process and time to discuss 2nd Tier. Actually my proposal does just that since changing the charter means we will still have dialogue and negotiations with the unions as obligated by law. A union lobbyist said Pension Reform would waste money since a second election would be needed once a 2nd Tier was agreed upon. Not so. As stated by the city attorney on Wednesday only one election would be needed since the 2nd Tier would then be implemented by ordinance which only requires a vote of the city council. The cost to the City to have Pension Reform on the ballot now is less expensive then a special election advocated by others.

Another union speaker was critical since my pension reform proposal did not mandate a specific 2nd Tier. This instead gives the Council flexibility in decision making as actuarial studies need to be completed as well as negotiation with our unions. Also, this allows the Council in future years to have the flexibility in adopting changes to a 3rd Tier should city revenues continue to deteriorate.

A letter submitted by a lobbyist for the union talked about needing two to four years to negotiate a 2nd Tier. This would be problematic—we should conclude negotiations within one year. Delay misses the opportunity to stop the bleeding. Another union speaker claimed the city is not hiring when that is not so. The City must hire to replace retiring employees. In fact 35 percent of the workforce is retiring in the next four years and it is important to lock in those cost savings. If we do not, each new employee carries 60 years of fiscal pension liability (30 in their career and 30 in retirement).

With all due respect, I believe the union leadership is missing the point. If we do not provide new pensions for new employees then the alternative will be to lower wages significantly and/or layoff employees. Laying off employees will affect residents. If the pension costs had not soared by $60 million this last year then we would not not be closing fire stations, libraries, postponing police academies and laying off other city workers.

The criticism I have heard from non-union people is that my proposal is not draconian enough and that the pension plans should be blown up. To them I paraphrase Voltaire: “Do not let the perfect be the enemy of the good.” Failing to act now will only lead to more obligations we cannot afford . Otherwise, do nothing and we will have more layoffs. Again, the increase in pension costs of $60 million dollars this year led to the layoff of city employees who provide services.

The ball has been teed up for the public. Speak now or forever hold your peace. Aug. 3 at 3:30pm. No need for a babysitter—City Hall is open to children. Bring a book or some knitting needles or both. If it is your first time to a Council meeting you may find you enjoy watching your city government in action.

On Tuesday, Aug. 3, the City Council will decide on five possible ballot measures that would go before San Jose voters in November. So far, the Council has budgeted money to place two items on the ballot; therefore the council must choose two of the five. However a group known as Baseball San Jose has offered to pay for the cost of putting the Downtown Baseball Stadium question on the ballot, so three ballot measure may go before voters.

Below is each proposal in alphabetical order:

Baseball Stadium
(This will be considered at the Rules Committee on Wednesday, July 28 at 2pm. The Rules Committee would need to support placing this item on the Tuesday, Aug. 3 City Council agenda.)

Ballot Language:
Shall the San Jose Downtown Ballpark and Jobs Measure be approved to authorize, but not require, the use of Redevelopment Agency funds, with no new taxes, to acquire and clear a site for a baseball stadium, fund related off-site improvements, and lease the site for a professional baseball team where the team would pay all on-site construction costs, operation and maintenance costs, generating new tax revenues for City operations?
Binding Arbitration
(This will be considered at the Rules Committee on Wednesday, July 28 at 2pm. The Rules Committee would need to support placing this item on the Tuesday, Aug. 3 City Council agenda.)

Ballot Language:
To provide fiscal stability, control costs, and help maintain the level of services being provided to residents, shall the Charter be amended to require outside arbitrators to base awards to City employees primarily on the City’s ability to pay and to prohibit creation of unfunded liabilities, increasing police and firefighters’ compensation more than the.rate granted to other bargaining units or more than the rate of increase in General Fund
revenues, and granting retroactive benefits?
Tax Medical Cannabis
(Already on the Tuesday, Aug. 3 City Council Agenda.)

Ballot Language:
In order to provide funding for essential City services such as police, fire, emergency response,street maintenance, pothole repair, parks, libraries and youth and senior programs, shall an ordinance be adopted to impose a tax at the rate of 10% of gross receipts on marijuana businesses in San Jose, subject to existing independent financial audits, with all revenue controlled by the city.
Pension Reformhttp://www.sanjoseca.gov/district6/documents/7-19-2010PensionReformVoterApprovalMemo.pdf

(This will be considered at the Rules Committee on Wednesday, July 28 at 2pm. The Rules Committee would need to support placing this item on the Tuesday, Aug. 3 City Council agenda.)

My proposal is to change the city charter language so the city can offer new employees some degree of lower pension the taxpayer can afford. Current employees and retirees will continue under the current pension system and will not be affected in anyway. Pension reform includes public safety, non-public safety, city management, RDA and Councilmembers. Official ballot language will be provided by the city attorney.
Sales Tax
(Already on the Tuesday, August 3rd City Council Agenda)

Ballot Language:
In order to provide funding for essential City services such as police, fire, emergency response, street maintenance, pothole repair, parks, libraries, and youth and senior programs, shall an ordinance be adopted to enact a one-quarter percent tax on retail transactions in San Jose, subject to existing independent financial audits, with all revenue controlled by the City?
Rules committee members are:

I think it is important that major issues should go before voters to validate Council direction or let the Council know something different.

In addition to the city of San Jose proposed ballot measures, there will be at least two other countywide ballot measures that raise approximately $14 million each. One is from VTA for $10 per vehicle annual fee for road repair. The other is a $29 parcel tax per property by the County of Santa Clara to fund children’s health insurance. Are these items what you would choose to fund with new tax revenue?

Since the City will most likely choose two of the proposed ballot measures (baseball proposal excluded) due to budgetary constraints, which do you believe are most important to be placed on the ballot if any? For me, I believe the most important two are Pension Reform and Taxing Medical Cannabis.

The two city council meetings held last week regarding the budget and labor negotiations demonstrated the need to make all labor negotiations public. If you are interested, you can click on this link and see for yourself the drama and trauma that took place that still does not have closure. This week’s meeting, June 22, will hopefully close this chapter.

I am and have been a proponent of conducting labor negotiations as a public meeting. Unfortunately, when the vote was taken last year to open up labor talks, the vote was a 9-2 against changing the process with only Councilmember Constant and I voting in favor. The process that exists is broken or to say the least, it is severely flawed. The current process of labor negotiations as private meetings hurts those it is meant to help: the employees and taxpayers.

Employees have no choice but to join their respective labor union and are dependent upon having someone else represent them at the bargaining table. It is up to those labor union representatives to inform their membership about the status and timely updates can be a challenge to a large unions. At the same time, Councilmembers are informed by the Office of Employee Relations (OER). However, councilmembers cannot really update residents of what is happening with labor negotiations and their tax dollars since these meetings are private instead of public. In addition the Council only gets one side of the story.

At both Council meetings last week, we saw the drama unfold of broken promises, innuendo, conspiracy theory, stories of personal financial hardship, co-opting of religious clergy and the reading of prepared statements. Behind the smokescreen of this drama were the real people feeling the pain and getting hurt, the employees and residents of San Jose. Both of these groups had to undergo the trauma of being tossed around in public with no one being able to share the full story. As I said at the meeting, 99 percent of city employees do a great job and are real people not faceless bureaucrats.

These city employees protect our safety, our property, our water, our young people, etc. However when you interject labor unions and secret meetings then it can lead to demonizing city employees when this is not fair. The blame should be on the current process which is maintained by both the labor unions and the city of San Jose management.

The taxpayer ultimately has the most at stake since they are the single largest group in San Jose yet they are the least powerful. The taxpayer has a right to know early on how much we have and what we can afford. Only through this dialogue can there be the opportunity for everyone to be on the same page and understand that if we as a city want more services or the same services we might have to pay more for it. On the other hand, if everyone is on the same page then structural change can be demanded so services are delivered more efficiently.

I am hopeful that the June 22 meeting is peaceful and we accomplish our duties civilly.

On a happier note, I am hosting the raising of the Rainbow flag at City Hall at 1PM, Tuesday, June 22 in celebration of the accomplishments and contributions of the Lesbian Gay Bisexual Transgender (LBGT) community in San Jose.

Monday: Medical Cannabis Outreach Meeting
The first outreach meeting regarding medical cannabis collectives was held Monday night at City Hall. Even though the meeting was held late in the process, it was well attended with over 150 people. There were two main groups present: residents and collective patients. Not one person spoke against compassionate use of medical marijuana in San Jose, however, both groups agreed that the locations should be away from schools, parks, daycare centers, etc. Last October, when I initially brought this issue to the Rules Committee, I advocated that we restrict where collectives can locate and include setbacks from locations like schools, etc.
A gentleman in a wheelchair brought up the point that attorneys’ offices are located next to houses and schools in San Jose and that those attorneys have clients who visit their offices that may be violent criminals, so how come we don’t regulate where attorneys can locate?

City staff proposed a “lottery system” to award a permit for collectives. Not one of the 150 people present supported this idea. Some shared that a lottery system is ludicrous because it sets up an irresponsible process to possibly award collectives that do not follow state law and may not have solid responsible procedures in place.

Tuesday: City Council Meeting
The longest agenda item was the issue about boycotting Arizona because of their illegal immigration law. After several hours of discussion, and testimony, I voted no. I did not make extended comments because I did not think that this matter should have been on the Council agenda. On any given day the other 49 states could pass a law that I/you/we may not agree with. As a city, we do not have the bandwidth to meddle in what other states feel is right for them. This is why we choose where we live. I wrote a blog related to this topic more than two years ago stating my views that you may read here.

Wednesday: Closing of Fire Station Council Policy
I met with the fire chief on the last-minute proposal to close Fire House 7 in this year’s budget. I met with city management a few months ago and asked the question “Did the managers budget include closing any fire houses?” The response back was “no.” They shared, instead, that they were going to move forward with “dynamic deployment,” which would include moving and eliminating fire engines from stations that have two vehicles. I was told that the chief, assistant chief and a member of the city manager’s office would have a follow-up meeting with me. We did and again I was told that no fire house was going to be closed.

Then, on May 28, a management budget memo (MBA#39) came out that said that an elimination of an engine was going to occur. Actually, it’s the closure of Fire House 7. No one from the management office nor the fire department had the gumption to call me; thus my request for an additional meeting.

This budget memo violates the city-wide policy on fire station closures which Mayor Reed, Vice Mayor Chirco and I championed two years ago. The Council policy states that changing the make-up of a fire house—whether it be consolidation, closure or relocation—requires a policy discussion prior to being a budget discussion, and must be accompanied by a community outreach process.

The policy focuses on using data as the basis for changing the structure of our fire houses and ensures that the community in the affected service is notified and part of the process instead of being told after the fact. Closing of fire stations based on data and outreach may occur next fiscal year but not this fiscal year. I wrote about this policy back in September 2008.

Thursday: Neighborhood Services Committee Meeting
We discussed selling the city subsidized Rancho del Pueblo nine-hole golf course. I suggested we sell the entire 30-acre parcel to create a housing/retail village and create 1-2 soccer fields for open space as well. I believe there is higher demand for soccer fields then golf. We would take the money from the land sale and pay off the mortgage for Rancho del Pueblo 100 percent and pay down the mortgage on Los Lagos Golf course by approximately $12 million based on medium density housing. The more density we allow the more money and open space we can get.

Friday: San Jose Municipal Rose Garden
More than 200 Google volunteers came out to paint, mulch, fertilize, rake and deadhead at the Historic Rose Garden Municipal Park. In 2007, I pushed for a policy that would allow volunteers from private companies to work in our parks when their respective companies have a community service day. I remember asking again and again for the council to allow this change and the persistence paid off. None of the Google employees were interested in switching careers but they thought the park was a real gem. I wrote about this policy change 2.5 years ago.

This year, the San Jose City Council is forced to make drastic cuts. Unfortunately, the city of San Jose has had a deficit for the last decade even before the Great Recession. In fact, even without the recession, San Jose’s financial obligations are significantly higher then revenues coming into the city.

As a result current elected officials are left with trade offs often having to pit necessary services against each other. This year the deficit is $118 million. This is more then the entire library, transportation, planning, code enforcement, information technology, city attorney and public works departments combined.

The purpose of the survey is to gauge your thoughts about what means the most to you knowing that difficult decisions are going to be made and for you to share your thoughts on how the city can save and make money.

For example, there are alternative cost savings ideas that I support like second-tier pensions for new employees the taxpayer can afford, selling the Hayes Mansion, selling one of three golf courses, requiring affordable housing to pay property taxes, outsourcing cleaning/maintenance to save money, capping accrued sick leave payouts, to name a few. These will take longer to implement, however. If our City would have considered these items when I first discussed them, we would benefit from the cost-savings today.

This survey covers choices that must be made by June 4. The Council and all non-union personnel have taken a 10 percent pay cut and have requested that all of the 11 employee labor unions do the same so we can bypass massive layoffs—thus we would be able to provide expected services to residents. A 10 percent pay cut from all employees will help; however we would still be left with an approximate $60 million deficit.

The survey closes May 30 at noon. Survey results will be published on May 31 on SanJoseInside.com

Last week, I attended budget meetings in council districts 9 and 10 as well as the labor unions’ budget meeting at the Tully library. The people that attended this meeting were mostly union members and city council staff. It was admitted at the meeting that significant layoffs were inevitable since the deficit is enormous.

Ideas were presented on what money-saving measures could be implemented and what new sources of revenue could be found to balance the $118 million budget gap. Ideas ranged from replacing natural lawns in parks with artificial turf (lower ongoing maintenance costs, but more costly upfront) to turning down the air conditioning at city hall during the summer. Others included putting banner ads on the city website for advertising revenue and charging owners of vacant property a fee/fine since they do not have a tenant.

Although many “creative” ideas were mentioned, none of them seemed to really tackle or help offset our deficit of $118 million—nor did the suggestions even get close to $1 million. Other thoughts were a “crash tax.” For example, if you were to get into a car accident and police or fire truck showed up, then you would pay $500 to $2,000, since you used city services. Another idea would have the city attorney sue code enforcement violators for fines owed rather then placing liens on their property as we do today.

There was a proposal advocating outsourcing. Really?! This concept would outsource the workers compensation program to a third party since it would be cheaper and faster then if the city continues to run it. Interesting that it makes sense for this program but not outsourcing city hall janitorial to keep swimming pools open!?

The major theme at the meetings, however, was about borrowing more money. There was a discussion advocating pension obligation bonds (POBs), which is an arbitrage scheme where the city borrows tens of millions of dollars in the bond market, and then we give that money to the city retirement funds, hoping the retirement board investment strategy earns more money than the city pays for its bonds. If the retirement fund does make more money than we owe the bond holders (and the associated investment fees), then the city can spend the difference. However if the investment return is lower than the city’s cost, then city loses even more money. Similar to a cash advance on a credit card and then investing the cash advance amount in the stock market and hoping that the stock will have a higher return then the credit card interest rate. Also, by issuing POB’s the pension obligation, which can vary over time due to investment returns, becomes a hard liability in the sense that debt service is fixed for 30 plus years.

Probably, the «best» idea, was to borrow money by taking out tens of millions of dollars in one-year notes/commercial paper to pay for ongoing city services. Then, when these notes come do in 2011, we would issue more notes to cover the original 2010 notes. When the 2011 notes come do in 2012, we would issue more notes again for 2013 and so on or until city tax revenue came back.

First, the revenues will not come back to pay for existing city services since pension obligations as a percentage of the general fund will continue to grow faster than revenue coming into city coffers. Second, this bright idea is like a consumer who charges up one credit card and then gets another credit card to pay off the previous one and so on. Issuing commercial paper to cover ongoing operations would hurt our bond rating and banks that provide San Jose with Letters of Credit will look at the city as irresponsible. I cannot recommend this type of borrowing/financing for city services as it passes on the problem to another eneration. We are partly suffering now because of the lack of tough decisions by previous elected officials at all levels of government.

“We should avoid ungenerously throwing upon posterity the burdens that we ourselves ought to bear.»—George Washington

Last week, the Council finally discussed my memo and voted to have staff come back with a draft ordinance for final review regarding medical cannabis. Currently, 14 states have legalized cannabis for medical purposes and 14 other states are considering legislation now. I attached a memo from the US attorney general saying that the federal government will recognize state laws regarding legalization of medical cannabis and additionally, I provided an 11-page document from State Attorney General Jerry Brown that provides guidelines to municipalities on implementing ordinances that regulate medical cannabis collectives/cooperatives.

Even if San Jose chose not to adopt an ordinance, people have the legal right to cultivate and form marijuana collectives for medical purposes under Prop 215 today.

Since my memo was heard at the Rules Committee meeting last October, I have spoken with many San Jose residents. Their comments have commonalities that could be broken into four different areas.

One viewpoint from a handful of residents is that cannabis is a terrible drug that ruins people’s lives, and all efforts should be into keeping it illegal even for those that have painful afflictions like AIDS, cancer and MS. Some felt that under no circumstances should anyone use cannabis to numb the pain since we have prescription drugs for that. Their views are strong and are often not open to discussion, as in the case of a gentleman who held this view who hung up when I called him after receiving his email.

I understand that people may have experienced a friend or family member that abused illegal drugs or they are morally opposed to their use; however they do not seem to have a problem with alcohol or tobacco since they are legal. These folks also did not find a problem with prescription drugs. In the cases of alcohol, tobacco and prescription drugs we know that some people abuse them and this abuse comes at great cost to themselves, family and law enforcement.

Others called with personal stories of family or friends who had died of a painful disease years ago. They were told by a doctor at that time to get some marijuana and so they went out and purchased marijuana from a drug dealer for their ill family member. One 80-year-old resident told me that his family bought marijuana for his brother 25 years ago. He said the last 10 months of his brother’s life was good because of cannabis and his brother only went to the hospital just a few hours before he finally died of cancer.

Another group of residents were supportive of medical cannabis or indifferent but they did not want to see these facilities adjacent to residential areas and felt that there should be some regulation in addition to zoning. My direction in my memo was to place the dispensaries in industrial areas which are away from residential neighborhoods, but Council gave planning staff some leeway for the June ordinance that might include medical offices or areas zoned commercial, but definitely away from adjacent residential. Alcohol is distributed in nearly 1,300 places in San Jose and over time seem to just blend in with the rest of our commercial business.

As far as regulation, one that I am keen on is open book accounting of these collectives that allows for financial audits as needed.

Others were in favor of legalization of cannabis for any purpose. They felt that our country had tried prohibition of alcohol from 1920-1933 and was unsuccessful. The only thing prohibition did from their view was to make organized crime wealthy and create health issues with moonshine. They had strong feelings that people will do as they wish and the wars on drugs has been unsuccessful which has only filled the pockets of organized crime. Therefore, they wanted legalization and taxation like alcohol.

They felt prison cells should be reserved for the those committing violent crimes and not possession of marijuana. A mother told me about her 20-year-old son in college, and said that it is easier for him to get marijuana then it is alcohol, since alcohol is regulated.

Which ever viewpoint, issues like this stir up interest in local government. Which viewpoint do you hold?

Monday: No Impact Man Film at City Hall
Nearly 300 San Jose residents attended to watch this documentary, which portrays a family that adopts environmentally friendly choices over the course of a year. For example, they bike instead of driving, buy only locally produced food and give up their television. The main point of the evening was that we do not have to wait for government to mandate behaviors that help the environment but that collectively we as residents can choose to compost, use less electricity, bike vs. drive today, etc…A reporter from the San Francisco Examiner attended and wrote about the event. Read the report here.

Tuesday: City Council Meeting
Council waived the business license fee for the first 1,000 business under 35 employees retroactive to Jan 1,2010. Some on the Council commented that it was symbolic and would not create jobs. The Council does not create jobs; private individuals do. If the Council wants to do something symbolic lets get rid of the Labor Peace regulation and allow Starbucks to open at city hall as planned. Nearly five years and still empty.

During public comment on the Mayor’s Budget message, a lobbyist from the union chided the Council for even thinking about 2nd Tier benefits that the taxpayer can afford since it would be unfair to have people working side by side who have different retirement benefits. The next non lobbyist speaker stated that people in private sector are compensated differently from each other today and they survive. The current pension system is unsustainable and must be changed for new employees.

A couple of SJI readers asked last week how retirement works under the city charter. Here is the response to that question:
Each employee puts $3 and the city puts an additional $8 into the retirement fund. On top of the over 200 percent match, the city guarantees an 8 percent net rate of return, but the fund needs to gross 9 percent to cover investment fees. (Average rate of return the last 10 years is 4.4 percent) If the retirement portfolio (stocks, bonds, real estate,etc.) does not return 8-9 percent, then the taxpayer covers the difference.

Any changes to the current system requires a vote of San Jose residents. As we hopefully implement 2nd tier benefits I would suggest an option for new employees of a one-to-one dollar match up to the federal 401K limit of $16,500 and no guaranteed 8 percent return. This way the retirement funds will continue to get funded by new employees much like social security is funded by younger workers. The newer employees will draw less benefits but then we will not have to close more libraries or layoff more police in future years.

A dollar-for-dollar match (100 percent) is extremely generous in comparison to the average 3 percent match of private employers to 401K’s. If there are specific positions in our city that are tough to recruit then raise the entry level salary since young workers want more money up front to buy a home or fancy car. Same time if there are positions with many qualified applicants then those entry level salaries should be frozen indefinitely or lowered.Wednesday: Grand Boulevard Committee, Member
Attended meeting at SamTrans in San Carlos. The purpose of this committee is to provide a venue for cities and transit agencies from South San Francisco to San Jose to plan transit-oriented developments all the way up and down the El Camino Real. The thought is through density, the El Camino will gain the improvements to add large sidewalks and pedestrian friendly accoutrement’s the entire way creating a Grand Boulevard.Thursday: Public Safety Committee, Member
The committee received a verbal report from staff on why hiring retired San Jose Police Department (SJPD) officers is problematic. Staff response seems odd. We have many qualified retired SJPD in our area that it seems silly not to hire them to do background checks for new recruits instead of pulling police officers off patrol to do this work. But then again we have postponed the police academy indefinitely yet we fund a community center in Los Gatos for $80K out the $11 million in tobacco funds that goes towards charities.Friday: Diridon Joint Policy Advisory Board, Member
First meeting of the Diridon Joint Policy Advisory Board whose goal is to create a Grand Central Station of the West by collaborating with state, federal, transit districts, adjacent residents and business owners over the next 10-20 years. We elected Mayor Reed as the Chair.

Photo radar helps augment traffic safety, as well as that of pedestrians and neighborhoods. A tweaking of the current policy to improve safety will not cost the state any money, and in fact will raise money while at the same time lowering emergency room health care costs. Speeding cars in our neighborhoods continue to remain an issue. The City of San Jose does what it can to manage speeding on our streets with the dollars we are able to allocate.

The SJPD aggregates the complaints and then tries to prioritize them as a way to identify the hot spots. The other portion of traffic enforcement’s time is spent at intersections with the highest rate of car accidents. Of course, as pointed out last week on my blog, we only have a limited number of police officers covering a city of a million people.

The other City tool is our Department of Transportation (DOT), which has a small but dedicated group committed to traffic calming who work with a limited budget and are mandated to follow state law. The state determines signage, street markings and the actual speed limit on San Jose streets.

San Jose previously had photo radar: a van parked on streets that took pictures of car license plates that were speeding. However, due to issues at the state level, the program was eliminated. Data from the DOT showed that photo radar reduced speeding on neighborhood streets. Gov. Schwarzenegger has recently proposed an expansion of photo radar.

Drivers who speed are dangerous. Time and time again we have a tragedy of some innocent pedestrian getting killed by an irresponsible driver. Currently, red light running cameras are legal in California; the idea is to also allow that same camera to give out speeding tickets. There is also speculation of allowing mid-block radar as well.

Police cannot be on every street 24/7, but technology can help fill the gap. We need our limited police resources for actions that only a police officer can do like investigating violent crime, property crime, gangs and community policing.

On to other matters: On Friday, we released the mid-year budget review. We had less revenue than expected so we drained $4.5 million out of our $10 million economic uncertainty reserve. You may remember an October 2009 blog when a Lobbyist came to the council meeting lambasting the City to spend the reserve instead of saving the money. Individuals are told by financial planners to save six months of living expenses in case of unemployment, so our City, having a one percent reserve is the minimum and should be higher. Going forward we will have $5.5 million left out of an approximate billion dollar budget.

Also worth noting from the report was the annual Hayes Mansion subsidy from the city was $5.9 million which is equivalent to approximately 50 police officers or approximately 40 police officers and opening all of our libraries citywide on Sundays. Take your pick.

Finally our Building & Structure Construction Tax decreased 50 percent—from $8 million to $4 million. It’s important to note that affordable housing in San Jose is exempt from paying these fees that go towards the paving roads. As market rate housing is in the tank the only housing going forward are affordable housing projects that sadly do not provide parks either, again an exemption made by the city council. Think of that next time you buy new shocks or tires for your car.

The City of San Jose has contracted with a public opinion survey company to poll residents on the city’s budget in a project fondly known as “the City of San Jose Budget Prioritization Survey.” The control group of the survey is 900 residents representing the entire City. They will be contacted by home and cell phones.

In the end, the survey company will try to ensure that the demographic breakdown of survey respondents mirrors the demographics of San Jose, with a certain margin for error. This data will be shared at a public study session at the City Council Feb. 16 at 9am. This will give the Council scientific polling data on budget priorities from San Jose residents. In addition to the phone survey we will be holding a Neighborhood Association/Youth Commission Priority Session this Saturday at 10am at City Hall in room 119 to discuss the budget deficit. Both meetings are public.

Since you may be one of the 1,006,000 residents who will not be getting a call, I wanted to share some of the questions via a web survey and then share the results on San Jose Inside on Feb 8.

On another note, the Council passed a citywide inclusionary housing policy which Councilmember Constant and I voted against. Then a few minutes later, the Council made an exemption to the policy for one section of the City. So although a citywide policy passed for every developer, the City made an exception that one development did not have to comply with the inclusionary housing policy. Makes me wonder; if inclusionary housing is such a good idea then why make an exception?

I am one of the members who sits on the South Bay Recycled Water Committee, representing San Jose. This committee has investigated and is now recommending a partnership with the Santa Clara Valley Water District to move forward with recycled water and jointly build an advanced water treatment plant.

Now, after six long public meetings and a visit to the Orange County advanced water treatment facility, we have reached a tentative agreement that will span 40 years. We will be build an advanced water treatment plant on five acres right next to the existing water pollution control plant in San Jose.

The estimated cost will be $42-$47 million and the costs will be shared: $20-25 million will come from the water district, $11 million from San Jose, $8.25 million from a federal grant and $3 million from the state (Prop 50). The City of San Jose’s portion will not be coming from the General Fund but rather from money set aside from fees for just this purpose. Unfortunately, this is also the money that some would like to borrow so we can build more affordable housing although we have already built 18,000 affordable units in San Jose.

This plant will produce 10 million gallons per day of membrane-filtrated water, eight million gallons per day of reverse osmosis-treated water and 10 millions gallons per day of ultra violet light-treated water. What does all this mean? Well first, we will be able to demonstrate to regulators and the public that we can take wastewater and turn it into drinking water where we are able to remove particles in the parts per trillion level. This facility will allow for public demonstration of how wastewater is transformed into potable water. People will be able to drink the water after it goes through the many steps of advanced treatment, as they do in Orange County. We will also be able to enhance the recycled water quality for existing industrial customers who would like less salinity in the water which is good as it creates more demand for non-potable uses.

This plant is the first step for the facility. There is land adjacent to the facility to expand and produce even more clean water. However, the thought is to build the larger facility over time, as we need acceptance of advanced water treatment from residents. I recall when touring the Orange County facility that we where told that their water has traces of jet fuel left over from the defense industry and they were able to remove it to less then three parts per trillion. That’s amazing when you think about how the technology can get down to cleaning the water at that level.

It is important to remember that almost all the water you and I drink is recycled as only 3 percent of the water on earth is pure. Interesting thing I learned about San Diego is that 95 percent of their water is imported. by contrast in San Jose 50 percent of our water is imported. Imported water is always a risk since it may not be there in the future; however, if we have advanced water treatment, then we would have less risk about imported water being diminished.

Oftentimes people ask, «Why not just desalinate the water from the ocean and make that drinking water.» The cost to desalinate ocean water is very expensive. In addition it takes a lot of energy to clean water. The following is how many KWH per hour for one acre foot of water (a year supply of water for two small families):
1,500 KWH for Advanced Water Treatment
3,500 KWH for importing the water from the Delta
4,000 KWH for desalinization

Our water supply is at risk since there is a finite supply. Are you willing to pay a little more for reliable and clean water?

This will be voted on by the water district board in January and city council in February.

2009 was a challenging year. San Jose government had its decline in revenue in addition to suffering from an overall structural budget deficit. Many families in San Jose lost their jobs and still continue to struggle in finding another one. All of us have been impacted by the Great Recession of 2008-2009 in some way.

With the eye of the Great Recession’s hurricane ideally behind us, I look to 2010 as a year that government gets back to basics and provides the needs of the community, not the “wants.” For example, government should concentrate on how it will replace retiring police officers,(100 police retiring this year, which is double the normal rate) keep our libraries open and simply pass a budget that takes care of the basic things you would expect the city to provide as stated in the city charter. Basically, the things that you pay for as taxpayers.

I turned 40 in December. I spent my birthday with family and long-time friends. Many of my friends I have known since age five, from kindergarten in San Jose Unified School District, which equates to knowing most of my friends for more than 30 years. The majority of my friends are not political in their occupations and nearly all of them have never been to a San Jose Council meeting. Instead, they are teachers, nurses, Realtors, attorneys, tech folks, blue-collar skilled tradesmen, stay-at-home parents and—as my Mom likes to point out— most are married with children.

Many of my native San Jose friends have a very positive outlook towards San Jose. Their views are somewhat different than what I hear in my council office, where, typically, I hear alot about what is wrong with our city or questions as to why things aren’t done differently.

My friends income levels vary—some own the homes they live in while others rent. However, they all share similar dreams of San Jose’s future. Although they strive for a better city in many ways, they strongly believe that San Jose is a great city today. They are proud that we continue to have one of the safest big cities in the United States, and of our supportive of our police department. They like the small-town feel throughout the City even though we are a City of a million people, enjoy the great weather and, even with a recession, believe this region is still the best place to be by their standards.

When I spoke to my friends at my birthday and over the holidays in December, there was consensus that building the Arena and bringing in the Sharks were great decisions and because of that both female and male are positive on the chance of major league baseball in Downtown. They enjoy going to our Downtown for the Children’s Discovery Museum, Tech Museum, Christmas in the Park and look forward to the reopening of Happy Hollow Park and Zoo.

Most importantly, is they said that they have a choice of where they can live which is why they chose San Jose. That is an important point to remember, since if a person really dislikes where they live then they can simply relocate as many people do all the time.

2010 will carry its challenges and there will be many tough decisions for the council and for individual families. However, I hope the worst is behind us. They say flat is the new up and with that we don’t expect big growth next year but maybe over time. The city on the other hand will take 2-3 years to recover as it takes awhile for revenues to return to municipalities.

I wish you and your family happiness and health in 2010.

Saturday, Jan 9 at 9am is the next volunteer day in our San Jose Municipal Rose Garden. 600 bare root roses will be given away to volunteers who arrive before 9am compliments of Star Roses. See you there.

On Nov. 3 at the city council meeting, I removed an item from the consent calendar. The agenda item was asking for council approval to spend $286,700 for software. This particular software would help the housing department manage its loan program. Several years ago the Housing Department purchased software to manage this data, however, it never worked and we ended up going through litigation for eight years. (I blogged on this litigation in a June 29 post here.)

During the litigation process, I wanted to understand how we came to purchase something that didn’t work. I sat down with the staff from the Housing Department to become familiar with the current process and its shortcomings in managing the housing loan data in Excel spreadsheets. Other cities, such as Long Beach, Los Angeles, San Diego and San Francisco, all use Excel to manage this housing loan data.

I understood the efficiency that could be gained by using a different solution over Excel. My question however, was not about efficiency but rather if it was worth the City spending six figures-plus on something during a recession. Basically, is it worth it? We don’t really analyze Return On Investment (ROI) in government as in private sector when it comes to adopting new technology. Efficiency gains by technology usually means you can do more with less people, and thus creates hard dollar savings. But that typically does not happen from what I have seen so far in government.

Personally, I thought Google Apps would have been a better and much more affordable solution then Excel spreadsheets. As you may know, Google provides business applications that allow data to be created, stored and shared via the web for $50 per user per year. These applications can be used by more than one person at different locations at the same time. This technology allows collaboration from anywhere with data security and restriction of who is allowed to view/edit data, and includes automatic email updates when data is changed. I use Google Apps for documents that I create and share.

In November, I recognized the name of the vendor who was selected by the Housing Dept. for this $286,700 purchase. However, I did not see the vendors who directly compete with this company. I wanted to know if these companies had been notified of the Request for Proposals (RFP). That answer was not known on Nov. 3.

My preference was to reject all bids and rebid—but this time include direct competition and ask for a best and final offer. This matter was not time sensitive, since the Housing Dept. has been using Excel for a decade. The Council instead asked that the answer be provided in one week at the next council meeting. Six weeks later, the response came back—and two local direct competitors had never been notified about the RFP. (Six weeks in my view would have been plenty of time to get a bid from the the two local competitors).

Now there is nothing sneaky here. It is actually our fair and transparent process. You see, whenever we want to buy a car, paper products or software we use BIDSYNC out of Utah. BIDSYNC is a vendor community that bids on government projects/services that our city subscribes to annually. It is a quick way to hit a large universe of vendors. However, not every vendor is part of BIDSYNC.

So with that said, the software was selected and it may very well do everything promised. But I have found not having direct competition causes inflated prices. With the current recession, software companies are discounting as much as 70 percent and the city should get those same discounts. I spoke with a CFO at a company with approximately 100 employees that uses the same software that was selected and found out that they pay half the price we were quoted on the software subscription. A private sector CFO can really work over vendors to get the best price—we do not have that option with government procurement as “shopping of bids” is not allowed. If we were to do this then government might be accused of playing favorites.

The non-tech analogy I gave at the council meetings was: Let’s say the city wanted to buy an American vehicle for a code enforcement officer and the bid went out to the vendors and we got three replies: Ford, John Deere and Caterpillar. Well certainly they are all American vehicle manufacturers—however, this is not direct competition, as John Deere makes tractors and Caterpillar makes construction equipment. Therefore Ford would win the order. But at this point if we picked up the phone or emailed General Motors and Chrysler to bid, my guess is that the final price from Ford would be lower due to the direct competition.

At the Dec. 15 Council meeting, this item required a vote of the council to approve. So knowing that direct competition lowers the price and another company was paying half of what we were paying I could not support this item.

My larger worry is that if we decide to roll out this software to other departments we have set the price artificially high. I would rather negotiate up front to get the best price or have price tiers already negotiated based on expansion.

The Council punted the Redevelopment Agency (RDA) budget last week to February 2010. As has already been highlighted in the news, the state is taking $75 million away from San Jose’s RDA. We need to pay the State off in May and identify where the money is coming from in March (no negotiation or payment plans on this matter are allowed by the State). The legislature, recognizing that this payment would be difficult for all RDA agencies, allowed for borrowing from affordable housing money which is 100-percent funded from RDA. Twenty percent of all RDA money goes off the top to the Housing Department in San Jose. The payroll for the housing department alone is $9.7 million a year for 83 employees for an average salary of $117,000.

The Mayor’s Budget message was pragmatic in that it said let’s not spend any money ‘til we work out borrowing the money from the housing department to pay the State; let’s determine whether or not RDA is able to issue bonds to pay for a capital program—which would include matching the hotel owners’ share and expanding the convention center; and let’s continue negotiating with the County of Santa Clara (which by the way in the last decade has been paid $270 million by the RDA).

The Mayor had a very good public meeting with stakeholders from all sides prior to writing the budget message. Everyone who attended realized the choices are difficult and few options exist. Everyone at the meeting got the same information—that San Jose has already built 18,000 units of affordable housing by spending hundreds of millions of RDA dollars making San Jose the number-one provider of affordable housing in the state of California. Everyone left the meeting understanding that there is no pixie dust to magically fix things. A majority at the Mayor’s meeting felt that economic development should be the priority now.

However, when it came to voting on the budget, another option was voted upon at the last minute that asked for a $25 million reduction in how much would be borrowed from the Housing Dept., and instead look at borrowing from other sources. This option was well liked by the audience (which was made up by mostly paid affordable housing lobbyists and people who work for affordable housing entities in some capacity—the Housing Director is campaigning against the Mayor and is ensuring that she has her supporters at the meetings). This “option” would take money by borrowing monies from the following: Commercial Paper backed by the General Fund, Sewage Treatment Plant Connection Fee, Library Parcel Tax, Sewer Service and Use Charge, Integrated Waste Management, Ice Centre Revenue Fund and HNVF-Anti-Tobacco Funds. This “option”—taking from all of these other resources—was approved on a 7-3 vote with Mayor Reed, Pete Constant and myself voting no.

We have borrowed money from some of these funds before, but that was to balance our general fund so we could fund core services like public safety and not more affordable housing. If we borrow this money now to create more affordable housing, then we will have one less arrow in our quiver to balance the general fund budget in June.

My question to you is: Should we use money that is supposed to go towards core services like sewers and water treatment plant so that we can build more affordable housing that does not pay fees for parks or road paving?

How do you feel as a voter that may have supported the library parcel tax to let that money be borrowed for more affordable housing that does not pay property taxes (property taxes is the number one revenue source to pay for city services) versus what you intended that money to be spent on…libraries.

I remember months back Councilmember Constant and I were criticized because we wanted to use the Healthy Neighborhood Venture Fund (HNVF)/Anti Tobacco money to pay for school crossing guards, a public safety service the City has had in place since the 1940’s. It’s okay to use these funds for affordable housing but not for crossing guards? Hmm…sounds like maybe a vote of the people should be had on how these funds should be spent. With a $75 million deficit just for RDA and another $96-plus million deficit for the City’s General Fund, I am all for the residents sharing their votes via the ballot. If we can ask residents to raise their taxes then we can ask them for direction on spending their money.

Last week, at the city council meeting, I removed an item from the consent calendar on the agenda for discussion. As you may remember from my blog about San Jose’s million-dollar golf nets, consent calendar items do not have individual discussion, but rather are voted on all at the same time. If one wants to discuss a consent item, you have to “remove” it for discussion.

The item I removed was asking $993,876 for the library to spend over the course of seven years on an online tutoring service for kids. Nearly a million dollars is a significant amount of money. The $993,876 was not restricted funds and could have been spent on librarians instead. My comment/question to the council was: If we know we are going to have to do layoffs of library staff on July 1, 2010 to balance the budget, then maybe we should hold off on discretionary spending so we can retain staff to keep our libraries open. This expenditure is approximately two librarians salary each year for seven years. My comment fell on deaf ears and the council voted to spend this money; I voted against this expenditure.

When it comes to the libraries, the core deliverable to me is that libraries are open as many hours a week as we can afford, so users can access information and have a place to study. Any and all other programming should be funded after libraries are open seven days a week. If we have funds left over after libraries are open seven days a week then we can start evaluating the option of adding different programs. Until then, the City’s money should be used to keep libraries open with staff.

The online tutoring service could be canceled from year to year; however, good luck ever canceling a program/service once it starts.

On another note, I posted a survey last week regarding the Redevelopment Agency (RDA) budget. The RDA board adopts the final budget on Dec. 8. A person shared with me that the question I posted below (which appears on the survey) was “biased.” I shared that the information I gave was factual, not biased. I thought I would share the question with you here. I have added commentary in bold parenthesis:

The Redevelopment Agency has spent $774 million on housing (true) making San Jose the number-one provider of affordable housing in the state of California (true) by financing 18,000 units (true) of affordable housing while neighboring cities do next to nothing for affordable housing. (Neighboring Cities have not met the Association Bay Area Governments (ABAG) affordable housing targets, while San Jose has exceeded overall ABAG affordable housing targets). With so much given to affordable housing and so many people in need of jobs (12.5 percent unemployment), should the RDA borrow money from affordable housing reserves this year, as allowed by state law (true), to be spent instead on economic development to help create jobs?

Last week, the council had a special meeting to discuss the upcoming $96 million budget shortfall. $96 million is the equivalent of eliminating all library, park and community center positions citywide. My fellow councilmembers and I gave the city manager direction on how best we think the budget gap could be closed.

The first part of the meeting covered the shortfall—which may still grow by either continued lagging revenues from sales taxes and property taxes, or the state legislature grabbing more city funds. It is clear that there are no easy answers. I hear people say “since the stock market is up then the city budget will be ok.” The stock market going up does not provide jobs to unemployed San Jose residents nor does it bring revenues to pay for city services. The only benefit is it might reduce our pension matches slightly next year; however our pension portfolios are invested in more than equities.

We spent time talking about raising taxes on residents, such as a sales tax increase to pay for city services. I said that I would prefer that we increase taxes on card clubs and allow them more tables as allowed by state law, which would bring in as much as $12 million. The card clubs already bring the city approximately $13 million each year.

I also mentioned that taxing medicinal marijuana would help our budget deficit as well.

We then went on to options that would reduce per-employee cost, whether it be pay cuts, increasing medical co-payments or 2nd tier retirement plans for city employees not yet hired. As you would expect none of these options were popular with the council.

Then city management unveiled, its “Approach to Prioritizing City Services” AKA “Core Services.” This concept would be a long stakeholder engagement process that would include scoring and weighing the value of 450 city programs identified so far. However it would not necessarily eliminate programs that scored low. The presentation contained buzz words like «engaging stakeholders,» «peer review,» «finalize a work plan.»

Others said it is not right to prioritize and rank since it puts certain city services against each other. I shared that I am willing to participate, but that the approach presented is meant to give “political cover” in making decisions.

I believe that we can’t make paid interest groups happy all the time and at some point we have to vote to make changes that may be unpopular. The Council was elected to make decisions on behalf of everyone in their district and City, not just a few. This process could take a year, therefore, I immediately offered what my core city services are: Police, Sewers, Fire, Streets, Planning, Emergency Preparedness, Economic Development, Libraries, Parks and Code Enforcement. The presentation left out an obvious city priority: infrastructure. Without sewers and streets life in a city comes to a stop.

At the end of the meeting, the Council voted on my memo titled, “Make Union Negotiations Public.” The memo asked that closed door union negotiation meetings, which take up 75 percent of the city’s budget be public meetings. It did not pass on a 3-8 vote. The majority of the council voted to keep these meetings behind closed doors even though these past meetings are why we have a structural budget deficit.

One of the most important responsibilities a councilmember has is working on constituent issues. So far, my office has managed 4,675 constituent issues, which I refer to as “cases.” I set up a web database that allows constituents to track our case work in real time online.

In most cases we are successful in resolving the issue or concern. In other cases, constituents just want to share their comments on a particular matter. Some of the cases are comments on federal or state policy or other requests that are above and beyond what the city budget can provide, like, “please spend millions of dollars on a certain project” or “we want vintage street lights” when others streets do not even have street lights.

Recently, I had a request that came from a constituent who is a professional in the commercial real estate industry and is a veteran at purchasing property. He contacted my office a few months ago after purchasing a piece of property on Meridian Avenue. Unfortunately, this person did not contact the San Jose Planning Department before he bought the property to check how the property was zoned. He wanted me to tell the Planning Department to change the zoning to fit what he thought should be there instead of what the zoning has been for the past 30 years.

This request reminds me of the old adage: “buyer beware.” For example, someone may buy a home near a bar, school or church and then complain about the noise and parking. Well, it is the due diligence of the buyer to research the area, check zoning as well as any inspections a home or property may need. To choose to complain instead of taking responsibility for the purchase lacks credibility.

There are two things to remember when purchasing property; one, when you buy property, check out the zoning first so you know what you’re getting into—and if you do not like the zoning do not buy it. Second, if you buy a property and want to change the zoning, be prepared to invest time and money to do so, and figure that into the cost you pay for the property. Councilmembers cannot snap their fingers to change the zoning in the General Plan or at the whim of a real estate professional who thinks that their opinion should override the General Plan process.

I feel sorry for this person since he put himself into a predicament. However, blaming government for your own lack of due diligence is probably not going to help matters. In this particular case, I have met with the planning department and even asked the planning director to get involved to see how we might be able to help this person even though he is the one that did not take responsibility. The director is pursuing possibilities on how we might be able to help, but the real estate professional is still not pleased.

I remember from the private sector that sometimes there was the client who was never happy no matter how much you gave of yourself to help them, even when they made the mistake. So, in those cases sometimes you parted ways with the customer, since mutual respect was absent. Sometimes working on constituent issues is like working with private-sector clients, and we try to help, but have to admit that we cannot please everyone every time.